I am assuming it is a common question with newbies but I can’t seem to word it correctly on google to find me an answer. I know about setting limits and stops and today on my.demo account I executed a buy order and set the stop 5 pups below the previous low which was about 20. I set the limit at 45 which was just below the high of the candlestick. So all good and well the trade went in my favour but it was stopped at 45 pips.
When the trade went up to 68pips. A fixed or dynamic trailing stop would not have aloud this to keep climbing? Correct? Or would a trailing stop.still allow your limit to also increase of it is climbing in your favour?
Hope the question makes sense…
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If you have trailing stop active it will climb when your profit pip amount increase.
It will also move your stop loss value by pip earned and defined by trailing stop.
I hope you understand what is trailing stop and how it works.
Directly from Babypips’s glossary:
“Trailing Stop
A type of stop loss order that moves relative to price fluctuations.
In example, setting a 50-pip trailing stop on EUR/USD after buying it at 1.2550 would mean that if price rose to 1.2600, your stop would also rise by from its initial level of 1.2500 to 1.2550 (50 pips).
Your stop will then stay at 1.2550 unless price moves another 50 pips in your favor. This means that your trade will remain open for as long as price doesn’t go against you by 50 pips.
Traders often makes use of trailing stops to lock in profits while minimizing their risk.”
There are pros and cons to using these vs hard stops. I would do a search in these forums, there’s tons of info and threads about this any pretty much anything you need to know.
You can also read more about it in BP’s school Here
I hope this helps.
@jumperz I don’t understand your question. Can you post a picture of the chart and tell us what pair you were trading along with exactly where your orders were? Were you buying or selling? At what price did it take you out of the market?