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.! Keep in mind ! 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.
Trailing stop loss
stock market trading tip
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.
Rules for moving the stop can vary based on trade type, time frame and also the volatility of the stock you trade. 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 exit risk levels during a stock
uptrend
:
Another stock market trading tip
for trade management
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.
I definitely want to have my risk level moved above my entry (in long trade) if I already reached 2R profit level. 2R means twice the
amount I risked
in this trade from the beginning. Prepare
trade management
rules in advance as part of your
stock trading system.
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