trailing stoploss

[ankquo]

can someone please explain about trailing stoploss???

 

[Somatung]

can someone please explain about trailing stoploss???

Dear new member. Kindly use the Search tool from the forum for such topics and place your question in any open thread on it:

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Have a nice weekend / Dan

 

[NewBottle]

can someone please explain about trailing stoploss???

Trailing Stop Loss is nothing but a Stop Loss that helps protect your profits. Usually many people choose to keep pivots/support/resistance levels as TSL (Trailing Stop Loss)

For Example : You entered a stock at $5 kept SL at $4.50

The stock did well and your bet worked So Stocked moved upto $5.50, Now you are earning 50 cents per share. Now you can Move your stop Loss to $5.10c since the stock can either go up or down from $5.50, you cancel the SL at 4.50 and move it to $5.10 ( this confirms profit of $.10c per share.) This is called as TSL, it trails with your profit.

Most Experts would never book profits aggressively, as they never decide where markets will go, they let that decision to markets where they want to go.

Remember: If you keep stop Loss to close to stock price, your TSL will get hit, so give enough air for TSL as mentioned before previous pivot or support resistance line works for many Experts.

If you keep TSL too far away you risk loosing your profits.

Hence the Saying- Sucessful Trades go broke by booking profits early OR Strict your Loss and Let your profits Run free

 

[ankquo]

thanks for reply.

enter at $5
Stoploss at $4.50
Trailing Stoploss at 4.80

When I entered at $5 then market do not go up. Market go down from $5 to $4.6. Then what will happen in this case?

 

[NewBottle]

thanks for reply.

enter at $5
Stoploss at $4.50
Trailing Stoploss at 4.80

When I entered at $5 then market do not go up. Market go down from $5 to $4.6. Then what will happen in this case?

These are 2 different cases, if you change a Trailing stop loss to $4.80, your first SL is modified. So now TSL becomes new SL. Now any time markets go below $4.81 your are out of trade with a loss of 20c a share.

Consider this

If your original SL is still $4.50 and you don't modify this SL (means you dont add a TSL) and markets go down directly from $5 and below, your trading plan is prepared to risk .50c a share,

so in this case at $4.60 nothing happens, unless markets go down to $4.50, at $4.50 you will book a loss of 50c a share, this is called Market Risk.

Every trade you do involves certain kind of risk. You decide to limit that risk by putting a STOP LOSS, In our case we want the risk to be limited to .50c a share.

Please also note, if you are looking at your trading window, there is no extra option to use TSL, you need to modify your SL order to make it a TSL.

Also never add a new SL, always modify the current Buy/Sell LIMIT Order ( SL) to make it a TSL with new value... for example you go to Sell Order Of SL and then you click modify ( change the value of SL to make it a new SL) or in other words TSL.

I hope this helps

 

[ankquo]

Thanks for reply.

 

[NewBottle]

Thanks for reply.

Welcome

 

[OriOle]

Dear new member. Kindly use the Search tool from the forum for such topics and place your question in any open thread on it:

http://www.traderji.com/search.php?searchid=20991769

If you do not know how to use the forum search tool, kindly let us know and you will be guided.

Have a nice weekend / Dan

Thank you, sir