Saturday, 8 June 2019

4 Best Trailing Stop for Trading

1. Support Trailing Stop Resistance
Important levels such as Support and Resistance are points that are almost never lost on the trader chart. Besides being useful for determining the limits of current price movements, the S / R level can also be used to mark entry and exit levels, including Trailing Stop.

Trailing Stop installation based on S / R level can actually be profitable, it can also be detrimental. Because, in the condition of trending prices, both levels can change roles when the price breaks out. If the price moves through the Support, then the level will change to Resistance, and vice versa. But in the case of Trailing Stop installation, changing S / R can actually be used to get the ideal Exit reference level.

1. Bar Plus Trailing Stop
This Trailing Stop one installation strategy is almost similar to the X-Bar Trailing Stop, which is both using a candle reference. The difference is that Trailing Stop is installed on a new candle, by including certain number of pips. In order for the Trailing Stop installation to be more measurable, you can get the ideal pips amount by using the ATR indicator.

ATR (Average True Range) is a volatility indicator that can clearly show the value of price changes over time. ATR is very suitable for determining Stop Loss, because it is dynamic so that it can be used in almost all market conditions.

3. Moving Average Trailing Exit
Another way to determine Trailing Stop is to use the Moving Average. This indicator is widely used by traders because it is easy and simple. The type of MA indicator that is widely used as a complement to the Trailing Stop strategy is the 20-period Exponential Moving Average (EMA-20).

Same as the Trailing Stop strategy with Parabolic SAR, the Trailing Stop determined with the help of the MA indicator can automatically adjust to price changes. However, the risk of a closed position faster is also a weakness of the use of this one strategy. The key is to use this Trailing Stop strategy only when the market is trending and not covered in an atmosphere of high volatility.

To implement a Trailing Stop strategy with MA, beware when prices have just returned to the main trend, after failing to cross the MA line.

4. 1R Breakeven
The last Trailing Stop strategy that can be applied is 1R Breakeven, aka installing Trailing Stop right with the entry position. You enter a SELL entry at the level of 0.68787, with a Stop Loss at 0.69787 which is 100 points from the entry level. When the price moves down to the level of 0.68687, the Trailing Stop needs to be shifted right to the level of 0.68787.

Also Read  : Some of the Most Fatal Beginner Traders Mistakes

This method at a glance is similar to the example of the simplest Trailing Stop in the explanation of "R Trailing Exit". What distinguishes this strategy from the previous technique is that, even though the price continues to fall to 200 points or even 300 points, the Stop Loss is not adjusted to follow the movement. Because what is sought here is Breakeven as a result of the worst-case scenario, the Stop Loss needs to be left at whatever level of entry occurs.

Trailing Stop strategies such as this can provide broad space for price movements, making them suitable for use when the price volatility is high. But the downside, if the price reversal really triggers a Stop Loss, then there is no gain at all. This is a consequence that needs to be prepared to be borne if you decide to trade on the volatile market and apply the 1R Breakeven Trailing Stop strategy.

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