Trailing stop loss

In anticipation of opening my first demo account, I was wondering at what level should I place a trailing stop loss, one which moves up in line with increases in stock price, but allows some occasional downward movement.

Let's say I am buying shares at 100p.

I've read a few posts talking about 50 pips and twenty ticks etc, and I don't as yet know what these mean. I intend to buy into a few stocks and trade according to intermediate term trends. Any help appreciated.

Rob

rsd886647 said:

In anticipation of opening my first demo account, I was wondering at what level should I place a trailing stop loss, one which moves up in line with increases in stock price, but allows some occasional downward movement.

Let's say I am buying shares at 100p.

I've read a few posts talking about 50 pips and twenty ticks etc, and I don't as yet know what these mean. I intend to buy into a few stocks and trade according to intermediate term trends. Any help appreciated.

Rob

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Generally speaking, pips=currencies, ticks=futures, cents=stocks. If you are trading "intermediate term trends", then a very basic approach it to trail your stop based on swing points. If you don't know what that means, then read up on price action . . . it will be the best thing that you can grasp early on instead of looking for indicators that tell you what to do.

Keep trading.

I use Trailing stop and according to me fundamentally the stop loss mitigates a convinced gauge of peril while maximizing your venture returns. Anything that mitigates speculation risk at the same time as allowing a depositor to create potentially explosive returns is a huge thing. Trailing stop moderates a persuaded measure of risk whereas make the most of your endeavor returns. Anything that mitigates conjecture risk at the same time as allowing a depositor to create potentially explosive returns is a huge thing.

in forex - 100 - 200 pips trailing

rsd886647 said:

In anticipation of opening my first demo account, I was wondering at what level should I place a trailing stop loss, one which moves up in line with increases in stock price, but allows some occasional downward movement.

Let's say I am buying shares at 100p.

I've read a few posts talking about 50 pips and twenty ticks etc, and I don't as yet know what these mean. I intend to buy into a few stocks and trade according to intermediate term trends. Any help appreciated.

Rob

Click to expand...

I would recommend a 100 - 200 pip stop for trailing stops since the market can move quite a lot and if your stops are to small to trail you may get taken out of a good trade way too early

The same idea would work for any trade line out the range and use the middle of that range to determine a stop for example if google stock is trading between 300 and 350 and you entered at 300 use a 25$ stop and trail it by 50 that way if the price moves to 375 for a short while it may fall back to 50 but not take out your trade for profits - The best idea with trailing stops is to lock in a small profit and if your confident about direction stay in a trade while protecting profits. the total range distance can help you figure the trailing stop

Personally I don't use them often unless I'm going to be away from my desk for a while and I'm in a good trade and want to stay in that's why I'll use a number like 200 or so to trail with - Check out my thread here in trading journals and you'll see exactly what I mean in some trades I have made - If I used trailing stops I would have missed out on 1000 pips profits and 1400 pips profits etc etc

Cheers

Use a trailing stop loss that works well in back-testing of your system. If your system is based exclusively on fundamentals (i.e. what the stock is worth), you may want a much larger loss than if your system is based exclusively on technical analysis (i.e. predicting market direction). Also the duration you expect to hold a position before getting a reverse signal also matters. Those are some factors to consider, but ultimately what actually makes the most money for the least risk in practice is what's best. Different stocks will display different characteristics depending on who is trading them, including market makers and investors. There are no one-size-fits-all solutions. The reality and consistency of results is the ultimate arbitrator of what is correct.

There is no one answer to this question. It depends on what type of trading you are doing, your risk preferences, how long you plan to hold the trade for, how volatile the stock is, how large the spread is, and on and on. It takes a lot of skill to be able to successfully trail stops up to lock in gains, but still allow a good chance for even more gains.

Pick a number, doesn't really matter what. Decide when you would enter (without actually risking any money), then watch the market and see if it moves that distance and would hit your stop (don't forget the spread!). Keep doing this (for as long as necessary), until you have a number that doesn't get hit, unless you were wrong about direction. The smallest number such that this is true, should be your stop. At least that is how I see it. The better you get at timing, the more your stop will decrease.

I seem to recall that there is one spread bet co. that offers a trailing stop but I can't remember which one. Maybe someone knows ?

I think IG Index, offers a trailing stop option on it's limited risk account.

Regards

STRTRADA said:

I think IG Index, offers a trailing stop option on it's limited risk account.

Regards

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Thx