The Trailing Stop.
http://www.financial-spread-betting.com/course/trailing-stops-limit-order.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! You may have come across the idea of a trailing stop when looking through the types of orders that you can give to your broker. But a trailing stop is much more than just a simple order, it is a whole family of ways to look at exiting a trade.
Trailing stop simply means that your stop loss position moves, and trails behind where the price actually is. The idea is that you lock in a certain amount of profit as your trade develops, and your trailing stop will follow the price up at a distance, so with a winning trade you are assured of a profit over your entry position soon after placing the trade. With a fixed stop loss position such as discussed previously, if the trade suddenly plunged past your entry point you might otherwise find yourself facing a loss.
The first type of trailing stop entails using a moving average to tell you to exit the trade. This might be a five period moving average, which will follow the price closely. If the price comes back down and touches the moving average, that’s your stop loss signal and you should exit the trade. Depending on what your goal is for the trade, you might choose a longer period moving average, which while it will allow a greater drop before triggering, would keep you in a winning trade for longer even if the price is fluctuating a lot.
An alternative used by some traders is to use a tight moving average at the start, and when the trend is established and you’re making a profit, switch to a longer time moving average so that you can stay with the trade as long as possible.
Another way to use a trailing stop is called the ratchet method. In this, the position of the stop loss is moved up in steps, ratcheting its way up behind the price. Once again, this means that you never go back to the starting position of the stop loss, so no matter how catastrophic the reversal you’re still going to take a profit. Thinking back to the typical three step trend, a ratcheting trailing stop might move the trailing stop level up after each pullback, to just under the low point of the pullback.
Discussion of the trailing stop would not be complete without considering the trailing stop which your broker can offer to you, or which you could also emulate manually if you choose not to place your stop with your broker. With this type of trailing stop, you will set a distance away from the price that you want to stop to be. This could be a percentage, or more commonly is an absolute value.
Your trailing stop will rise incrementally as the price does, staying the set distance away. But the trailing stop level never goes down, even when the price does. So if the price reverses too far, it hits the trailing stop and you are out of the trade. All the time the price is going up, your trailing stop is rising and you are locking in more profit. This works particularly well if you are trading on a trend, and you don’t know how far it will go on.
Related Videos
What are Trailing Stops and How to Trade with Them? ☝️
https://www.youtube.com/watch?v=fE52K39OZDM
Forex Strategies: How To Use Trailing Stops 👍
https://www.youtube.com/watch?v=2ACA2TbT95g
How to Use Stops and Limit Orders to Exit or Get into Trades 👍
https://www.youtube.com/watch?v=AiHr1eUblUc
Great Tips on Where To Place Your Stop Loss!
https://www.youtube.com/watch?v=n7tXpiIoH08
Stop Loss Market Orders vs Stop Loss Limit Orders ☂️✋
https://www.youtube.com/watch?v=1CD3DM594q0
How To Set A Stop Loss Based on Price Part 1 🏳️
https://www.youtube.com/watch?v=5T2anRAHrHA
How To Set A Stop Loss Based on a Time Limit Part 2 🏳️
https://www.youtube.com/watch?v=66EacThefj4
How To Set A Stop Loss Based On Price Volatility Part 3 🏳️
https://www.youtube.com/watch?v=9Yz3tzBJFbg
Stop Losses: How to Use Trailing Stops Part 4 🏳️
https://www.youtube.com/watch?v=OdW3IPhxaYA
3 Alternatives to Utilising Stop Loss Orders 👍
https://www.youtube.com/watch?v=Vvb0i0xw2bQ
Using a Hard Stop in your Trading? ☂️✋
https://www.youtube.com/watch?v=15KZVzquc_g
Stop Loss Trading Strategies: Using Moving Averages As a Stop Loss ☂️
https://www.youtube.com/watch?v=yG6ox6UZlrw
How to Use the Average True Range to Set Stops ☂️✋
https://www.youtube.com/watch?v=lrytkoS4o_I
Using an Indicator as Stop Loss - RSI or Moving Average ☂️✋
https://www.youtube.com/watch?v=M_XVdSznrk4
How to Find the Optimum Profit Target per Trade 👊
https://www.youtube.com/watch?v=ZG2f1QGzx8g
Day Trading: Intraday Stop Strategy using ATR ☂️✋
https://www.youtube.com/watch?v=JDu2W59H7CE
Trading Without a Stop Loss: Why Some Professionals Don't Use Stops ☂️
https://www.youtube.com/watch?v=jH4t7cusNuw
