Trailing stop loss for trend following

Trading Discussion Risk Management Practices
1

Hi,

I entered trades on Aluminium and Carbon Emissions April 13th, and they have been running in my favor ever since. I have no clue when to exit the trades. I am a fan of Rayner, and he suggests setting a trailing stoploss on 3ATR (daily time frame). But that feels quite extreme. Even if the trades are running in my favor, that would mean setting my stoploss around where I entered the trades. I could also set the stop loss when the daily candle crosses 20MA or even 50 MA. Or be satisfied when the RSI crosses 70?

What do you suggest? I’m most interested in hearing from those who have been trading trending commodities successfully.

Looking forward to hearing about your experiences,

Magnus

2

I agree on the 3ATR thing. I like Rayner’s TA Youtube clips but a TSL on 3ATR is ridiculous: I hate giving up that much profit from the best price achieved and I don’t think its sustainable in real trading.

I just look for a dramatic acceleration of price - this will normally be followed by a pull-back.

Or a sequence of consecutive better daily closes or better daily highs/lows: these will likewise statistically usually be followed by a counter-trend close or counter-trend high/low - either way that’s an opportunity for re-entry if the trend resumes.

1 Like
3

You can set the stop loss at 3ATR timeframe but make sure that it is at the point where you won’t have to face loss and your profits are also not compromised.

4

In answering questions on specific topics,I suggest that some abbreviations like 3ATR time frame should be explained in brackets to help the newbies followup easily.

5

Capture some of the profits.
Leave the rest for further development of the account.

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6

If you are trend following then you should see a series of impulse moves followed by pullbacks. Once the impulse and pullback occurs, wait for the next impulse in your trend direction. At this point you can likely raise your stops to BE and then just raise it to the next level with each “step” in the ladder. Eventually you will get stopped out when you get a break of structure (BoS) that counters the trend but you will hopefully have your stop well into profit by then.

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7

I have been tempted to use trailing Stop .
Maybe let a small portion run after TP1 .
As long as you move your SL to BE its all good as far as I’m concerned

8

You can’t be in complete control purely on technical analysis, look at the latest reports and news on this asset to get a full understanding of the situation.

9

You should hold that position.
It is a fairly promising position for the long term.
Sometimes patience is the most important thing in our business.

10

If you are following the trend, you will see pullbacks after a strong upward movement. If I am buying, I want to try and catch the it at the bottom of this pullback. This is where you have to place your stop-loss order. If the market doesn’t start moving up past your entry price, you will lose some money, but not all of it.