Trailing stop loss management

for the best trading systems

The best trading systems have one thing in common. The most important goal for trailing stop loss management is to decrease risk as the trade develops in time.

Move your (trailing) stop-loss to the entry level as soon as trade develops enough in your favor.

As soon as you move your stop level into values slightly above your entry level you’ll feel less stress. This is because you already know that your trade won’t finish with a loss.

You must know how to use a (trailing) stop-loss order with your broker.

Move the stop-loss level under the low of the day immediately when you’re in a breakout trade and your stock price is closing the trading day above resistance.

The general rules say that the stop value can be set below the last support or above the last resistance in the trend movement. Moving averages are also used very often as a moving value of support or resistance. Your exit level could be set near them.

Here is example of setting trailing stop values during a stock uptrend :

I also like to move my stop level above the entry point (break-even) in case that stock price moved already at least to 50% of the distance between my setup entry and my expected target value.

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