Could someone please enlighten me. I thought trailing stops were designed to help you lock in profits…when you set a trailing stop of x pips, as soon as the market moves x pips in your favor, your stop kicks in (at least that’s how I understand trailing stops).
I have been demo trading with Alpari UK for the last week and I noticed that whenever I set a trailing stop, I get stopped out of the trade at a different point…for example, on one trade, I set a trailing stop of 30 pips, and I got stopped out of that trade with 23 pips. On another trade, set a trailing stop of 50 pips and got stopped out with 42 pips. On yet another, set a trailing stop of 30 pips and got stopped out with 6 pips e.t.c.
Now I don’t understand, am I doing something wrong or is it the broker or is there something about trailing stops that I don’t understand?
I am NOT familiar with alpari, so apologize for that, but you might notice TWO numbers on your trailing stop order ---- one is the actual number you choose and the other is the “alert” number that begins the stop loss process.
in “some” cases, if the market is moving quickly, your trailing stop will be triggered but the market then moves quickly away from that point again, and by the time the stop is executed, its at a higher market price.
trailing stops were the invention of the equities market, back in the days when FAST was price on a ticker tape ----- things are MUCH different today, with thousands upon thousands of orders being processed thru computers at a speed which would have driven grandfathers crazy.
now allow the dutch uncle to reveal himself ---- the answer to “trailing stops” is KNOWLEDGE — there are readily available custom indicators that will plant support and resistance points on your charts, and they are accurate and highly useful, and they allow you to set a “limit cover order” at that point which is honored by any broker except three i know of in southern albania (but lets leave them out of the equation for the moment)
check with alpari and get “their” side of the story in russian and see if it makes sense and if not, either really learn how to identify support and resistance or change brokers — youre choice
Correct me if I’ve misunderstood, but you did get stopped out in profit right?
Different platforms do operate this feature a little differently. I know if using MT4 it does just as you say… you set your t/s to x pips and it waits until you are x pips in profit before it sets your stop at breakeven…
So if you set your t/s to 30 pips, you would have been up 30 pips before the stop is set at your entry price. Since you got stopped out with 23 pips, that meant price went up 53 pips, and your stop trailed it by 30…then price retraced 30 pips, but your trailing stop stayed where it was…thus locking in your existing profit.
Same with your other trades…you set a 50 pip trailing, and stop out at 42…that meant price moved 92 pips in your favour before retracing/reversing back 50 pips.
I also use FXCM, and it’s trailing stop kicks in right away instead of when I’m up x pips.
Hi Sweet Pip, yes it stops me out at a profit. From your explanation, it’s obvious that I didn’t understand the trailing stop quite as well as I thought I did. I thought the stop would be set at the x price. I didn’t realise it would be set at breakeven first then trail the market by x. Anyway, so if I want to lock in a bit more profits, does that mean I have to reduce the trailing stop or what?
Well …that’s not easy to answer. Because it’s unknown at any given time how much price will go up and down, while it’s going up or down, setting too close a stop of any kind could potentially get hit before resuming it’s direction leaving you out. On the other hand, price might just zoom up or down and give you many pips because the trailing stop can adjust itself faster than you could.
There is no magic setting.
If you want to “take profit” at x price, then specify that in your order too. That way you could using the trailing stop to secure some profit in case it doesn’t quite reach your t/p and stops a profitable trade from becoming a loser. If price does hit your t/p then all’s good!
