How does one effectively "trail stops"?

B

BartSimpson

How does one know how to trail stops without knowing if price is not beginning to trend in the other direction?

I'm begun to see positive results if I just take the trade off at full contract size when it approaches a level that is likely to react, since I tend to get paid more than if it began to retrace and I then had to figure out whether to take smaller profit or wait and hold it out for more.

What do people use here, and does it matter the product you're trading? To me, things like Natural gas can trend hard, while US indices seem to chop around. I guess one needs to intimately learn the market in order to be able to figure out how to trail a position?
 
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You can trail a stop based on different methods.
First you need a trend otherwise it’s useless.

You can trail PA based (Higher low, Lower High)
Or attach to a trendline, moving average …
Some use previous N bars high / low.
Volatility stops do also exist.

If you take profit then you can always re-enter.

Trailing should win more in average,
Win less more often but sometimes win big.

If you trade with a trailing stop,
Let’s say a 2 points on the ES

Then it teaches you to wait for the perfect conditions to trigger your orders.

Buying into strength
Selling into weakness
 
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Sekiyo said:
You can trail a stop based on different methods.
First you need a trend otherwise it’s useless.

You can trail PA based (Higher low, Lower High)
Or attach to a trendline, moving average …
Some use previous N bars high / low.
Volatility stops do also exist.

If you take profit then you can always re-enter.

Trailing should win more in average,
Win less more often but sometimes win big.
More...

Thanks
 
BartSimpson said:
Thanks
More...

You’re looking for a mentor,
But what kind of trading are you looking for ?

DOM based ? Chart Based ?
1, 5, 30, hourly, daily, weekly based ?
Futures ? Options ? Equities ?

The best would be to attend a proprietary firm.
Maybe SMB or AXIA futures or anything like that.

Steven Goldstein has coached some market wizards.
Mike Bellafiore is SMB’s coach with Lance Breistein.
 
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I'll trade whatever makes me money. Just trying to make money at this point. DOM, charts, futures, options, it doesn't matter. Just trying to add equity to my account.

I'll look into SMB, AXIA, and others. Thanks for this info.
 
If I see a consistent trend without previous major resistance levels above, I might add a trail consistent with the ATR(+a tick or so) of the most recent large pullback candle. Trails have statistically lower odds of success, but the winning resulting trades can sometimes be huge if volatility slowly wanes.
 
Choppy sessions and trending sessions do alter. So that is one thing. Second it does matter what products are trailing. Because on stocks you do not get that much leverage so when you are trailing here you are speculating (except intraday trading on prop firm leverages). On Futures it is better, but really good only intraday because of the leverage you can get. If you are swinging with tight trailing stops you need to look into Forex market. You need to consider the more leverage you can get the more tight your trailing stop can be. This is especially for scaling in purposes here, which is the best way to trail in my opinion as you can get the best RRR trades in the end with low constant risk from the trailing stop.
 
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