How to set the Trailing Stop

[sanjfer]

Hello!
Can someone explain how to use the trailing stop. I am bit confused from where to calculate the points to set. From the SL or entry price?

[TruncatedUsernam]

@sanjfer

I am bit confused from where to calculate the points to set.

How do you know that a trailing stop-loss is what you need, then? Maybe you just want to try, to test them out?

I think they have one or two obvious advantages which are very minor, and many hidden disadvantages which are really big problems most people don’t appreciate.

i’ve never found them helpful.

@sanjfer

From the SL or entry price?

From the entry price. A “trailing stop” is a SL.

Unless you want to use both a fixed SL and a trailing SL - I have heard of that (once).

[Mondeoman]

@TruncatedUsernam

and many hidden disadvantages which are really big problems most people don’t appreciate

Can you elaborate on some of the disadvantages, or direct us to a link that can help?

[Pipsteroid]

@Mondeoman

Can you elaborate on some of the disadvantages

I think it’s really common and easy, without very careful and thorough testing of a kind few people actually do, to lose track of all the times that an automated trailing stop moves in the direction of your trade just enough to stop you out on some kind of a correction or reversal before the price then takes off again in the direction of your entry. Big winners can become small winners, this way. Because they’re wins, it’s easy instinctively to look at that as a “success” and not realise that it’s actually an expensive error.

Another problem is that with some platforms (for example MT5) you actually have to stay connected to the web for a trailing stop to work at all.

@Mondeoman

direct us to a link that can help?

I think our mutual friend summarised it well, here:-

Is it good to use a trailing stop?

i know you weren’t asking me, so please excuse me for interfering! for what it’s worth, if anything, i offer my own answer to that question i have four reasons (listed below very much in order of importance!) why it isn’t ok for me to use a trailing stop every single time i’ve ever tested it, over the decades (and i’ve really done a lot of backtesting and forward-testing of trailing stops, because superficially they seem so attractive!), i’ve found that everything i’ve ever done has perfor…

[Mondeoman]

That is really useful, thankyou. I have a number of open crypto trades where I have missed a market high recently, and was contemplating whether automation may be an answer. But unlike Forex, I have no leverage on the crypto trades. They can be up and down 100% in a day (the ones I am choosing, anyway), and that is a two edged sword. On the plus side, you cannot get stopped out. On the minus side, you need to accept not to use margin.

[Pipsteroid]

@Mondeoman

On the plus side, you cannot get stopped out. On the minus side, you need to accept not to use margin.

Yes, I see what you mean, of course. But on the other hand, I know absolutely nothing about crypto at all so it’s easily possible that nothing I mentioned is relevant to it at all!

[Cathar]

Hi,
I believe a ‘trailing stop’, we move it to following along with the price, too lock in some profits? We should look for consolidation zones to gauge where to place them (the trailing Stop Loss… I do) Some say “at least 1.3 (1 TP to 3 SL in risk %)” 2.30 is nice? Good luck…

[Cathar]

Yes… but that’s the thrill of Crypto, you can wake up rich or broke? You grow to love it… for large-cap they say, “the only time we lose, is when we sell?” With MEME coin, I get hurt.