Explanation of Trailing Stop needed

[LostInTransit]

Hi,

I am not asking for an advice so don't panic.

I am using Etrade and a newby as well when it comes to trailing stops etc.

Is there a such thing as safely regarded % trailing stop? Where would one start to enter percentage amount?

Would you ? and if you do, how would you count for the brokerage fees etc within the trailing stock ?

Can you tell me what normally semi pro-pro trader would do when it comes to conditional orders and Tailing stops?

May be some hypothetical examples specifically using Etrade? Please make it as realistic as you can so that follow the example stock to see its consequences.

Lets say for example 3000 stocks for TZN (last at 0.80). How would you place the trailing stops?


Trailing Stop Sell [X]

Price falls by [% as an example]

Yesterday's High [?]
Yesterday's Low [? ]
Yesterday's Close [?]

And what is ' Lower Limit (Optional):' for

I am just trying to understand how relevant those entries. Your example for a currently trading stock would help for me to understand.

Thank you for your time to show

 

[Tradesurfer]

I posted this thread a while back around volatility and stop placement. This is how I like to pick a stop that lets a stock have some breathing room. This can be applied to trailing stops as well although I prefer to wait until there is a profit before switching from an initial stop to a trailing stop

https://www.aussiestockforums.com/forums/showthread.php?t=15975

For most brokerage firms, there isn't a charge to enter a trailing stop, only if a trade gets executed.

Keep in mind around a % trailing stop as opposed to $$ or points. 10% of $50 is 5 points- 10% of $70 is 7 points. As a stock moves higher- if it is entered as a trailing stop % the gap will widen a bit. If entered in dollars that doesn't happen but its up to you which you prefer.

 

[tech/a]

ATR and Volatility stops are from the group of systematic type trailing stops.
fine for trading a positive expectacy model.

Personally I prefer to skew expectancy in my favour by setting stops at levels which clearly tell me sentiment has or is changing.
These of course vary day to day and hr by hr on smaller timeframes.
Most of the time a trade is performing it wont have a trailing stop.

Systematic stops are generally far enough away not to be affected by noise.
Problem is that they cannot discern noise from sentiment change.
not that important over a longer timeframe but shorter ones can be killed.

 

[satanoperca]

Hi Tech/A,

.
Most of the time a trade is performing it wont have a trailing stop.

If this is the case, what criteria due you use to exit the trade?

Thanks

 

[tech/a]

Hi Tech/A,



If this is the case, what criteria due you use to exit the trade?

Thanks

Good question.

For my discretionary trading

Eventually it becomes a trailing stop.
Again a personal preference is very tight initial stops
giving me larger position sizing (provided the pattern allows it)
and wide exit stops.
When I can see sentiment changing I place the trailing stop.(Volume and range---plus pattern).
Once out I then place a re entry above the most recient high (3 ticks) and set the initial stop below any reversal.

If this isnt taken out in 2 days I just close it and walk away.

 

[satanoperca]

Once out I then place a re entry above the most recient high (3 ticks) and set the initial stop below any reversal.

If this isnt taken out in 2 days I just close it and walk away.

Thanks for the reply. This strategy makes a lot of sense as it gets you back in the trade if you have been stopped out prematurely and 2 days seems a far enough time limit.

Exiting is a skill in itself. I have taken to setting the stop at the start of each day based on how I feel the trade is progressing based on volume, price and pattern.

What you have mentioned above gives you a second chance if knocked out to early.

Cheers

 

[steelcat]

what is Trailing stop? - index trading

what is Trailing stop? - index trading

 

[tech/a]

Re: what is Trailing stop? - index trading

I think what is meant is Index Trading with a trailing stop.

This maybe helpful.
Its from a spread trading site but the discussion on Trailing Stops covers quite a bit.

http://www.financial-spread-betting.com/Trailing-stop-loss.html