That's exactly right.When a stock has hit what you think may be...

That's exactly right.

When a stock has hit what you think may be a local low, experience tells one that it might still have further to fall.

So you don't want to get back on the horse till there is a clear uptrend established. By then I have usually invested the stop loss funds in something that seems a better bet at the time!

In selecting stop losses if you have a very positive long term view of the underlying, I would ask myself what is the worst short term spike downward that might happen.

Possibly taking the lowest point of the last 18 months as the stop loss might be prudent if you want to set and forget?