Is it good to use a trailing stop?

Beginner Questions
21

It all depends on how well you know how to apply this technique.
If you know how to apply a trailing stop correctly, it can significantly increase your income. It can also reduce your losses.
Just imagine if you manage to catch a trend and your stop loss moves behind the price. There’s an opportunity to make a big profit.

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22

if you manage to catch a trend, as you have said, then there’s exactly the same opportunity to make a big profit if you DON’T move your stop loss behind the price, isn’t there?!!! :laughing:

if you trail your stop-loss behind the price, you’re actually reducing the chance of making a big profit, because of all the times that a brief reversal (of the type which is normal) takes you out of the trade before the price heads off in your originally intended direction

THINK about what you’re saying, for a minute, Kubepaal!! and then maybe ask yourself why all those textbook writers mentioned above, and all the professional traders who have thoroughly and meticulously TESTED this are almost universally advising people NOT to use trailing stops … :woozy_face:

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23

If it’s in a trend I would use a tractal trailing on the 1Hour time frame after a certain amount of pips after testing the reversal point.

24

This entirely depends on your strategy. Personally, I would not use an automated trailing Stop - all markets move around a bit, even with the trader being ‘right’ - so for me it needs manual execution. I trail my Stop often if the strategy suits it. For instance, entering a trade off a Daily chart, via an order which triggers overnight, I might trail my Stop at the end of each day, to lock in some profit or to follow the trend. But given trailing too tightly will stop you out even if you call the market direction correctly, this is a classic case of ‘case by case basis’. But sometimes trailing can be great, absolutely.

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25

thanks for this. i will give it a try and observe.

26

thanks. this was what I was thinking of doing but apparently there’s a downside for setting a trailing stop. i’m still trying to figure out what’s best for me.