fbpx

0044 (0)1252 265088
Sam@ezeetrader.com

Should you trail your stops? Monday’s video…

In today’s video, I ask whether you should trail your stops once in a trade rather than leave them in their original position. There’s no right or wrong answer to this but certainly its worth spending time considering…

9 Comments

  1. Karl-Reply
    March 7, 2016 at 2:10 pm

    Hi Charlie,

    Good question! Recently i’ve been back testing a (semi) mechanical set up based on your day trading course. The set up involves having a 10 pip stop and trailing to break even when the market has moved 10 pips in your favour.

    This means that a lot of the time you get stopped for b/e (or lose) however, the backtesting shows that you make more money trailing the stop than you do if you leave it (mainly because on the winners you make at least 20 pips so the r:R is great)

    I’ve also been backtesting another (semi) mechanical set up based on DST and on this one it is much better to leave your stop in the original position until the trade is finished (though I often lack the stones to do that as these trades trades can run 80 – 100 pips in your favour before they get to target and I can’t watch that happen without doing something! (trailing a stop or taking something off). May just be my lack of experience though!

    Thanks,
    Karl

    • Charlie Burton-Reply
      March 7, 2016 at 7:04 pm

      Thanks Karl…..

  2. Mahesh-Reply
    March 7, 2016 at 2:54 pm

    Hi Charlie

    Thanks for the question. In my opinion it would be best not to adjust your stops when day trading if your method has been giving you consistent good results most of the time.

    It can also become a bad habit and get out of control if one is not careful. Again it all depends the set up you have at the time. If all your probabilities are lining up well then you could consider to trail your stop.

    Trailing stops when swing trading would be fine as you are only reducing your profits should the market reverse.You can also start taking part profits on the way up and let the balance run to your target.

    Thanks

    Mahesh

  3. david lloyd-Reply
    March 7, 2016 at 3:15 pm

    Afternoon Charlie,

    After purchasing your DST product I would say that break even after a certain move has occurred is best for that particular strategy,so i guess what I’m saying is it all depends on what your actual strategy is when it comes to stops.

    ID JUST LIKE TO ADD

    I’m the webs biggest skeptic when it comes to buying any trading/strategy products,The DST strategy has already paid for itself and I can honestly say it does work.

    If you want quality tools for your tool box you have to pay for them,don’t waist your time with the free stuff,your life will simply pass you by.

    As my Uncle once said “the only free cheese is on the end of a trap”…

    Thanks

    Dai

    • Charlie Burton-Reply
      March 7, 2016 at 7:03 pm

      Thanks David……

  4. Tudor-Reply
    March 7, 2016 at 3:18 pm

    Hello ,

    i trade on the 4 hour time-frame , and when price goes 50% in the direction of my trade , i move the Stop Loss to Break-Even . So if i place a market order buy and the Take Profit is 100 pips , after the market moves 50 pips in profit i move the SL to break-even . Good technique in my opinion………

    Tudor !

    • Charlie Burton-Reply
      March 7, 2016 at 7:02 pm

      Thanks Tudor. Like I said in the video there were no right or wrong answers, just whatever works for the individual so well done!

  5. geoff-Reply
    March 7, 2016 at 5:23 pm

    Hi Charlie, a tantalising question !

    If you look at moving stops from a quantitative risk:reward perspective it gets very tempting to move stops to protect profits. I’m not saying this is what you should do, but consider an example .. take a trade with a 100 pip target and a 50 pip stop (risk 1:2) .. the trade moves into a profit of 50 and if you don’t move your stop your trade now has a risk:reward of 2:1 .. and if it goes to a profit of 75 with the stop unchanged you’re effectively deciding to risk 125 for a reward of just 25. When your trades get close to target do you ever do a mental calculation about what you’re risking versus the potential profit ?

    Loving DST by the way

    Regards

    Geoff

    • Charlie Burton-Reply
      March 7, 2016 at 7:01 pm

      Hi Geoff,

      Good points raised. I understand your point about that but if you treated every trade like that, you would never run them to target. I would never get risk to reward trades of 1:3 let alone 1:10 if I did that. You made me think about it though!

Leave A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.