Protecting Profits With Trailing Stops

Literature about trading often advise to “let profits grow using a trailing stop”.

Wikipedia says that “a trailing stop loss is a slightly more complicated version of the stop loss order in which the stop loss price is set at a fixed percentage or value below the market price. If the market price rises, the stop loss price rises proportionately, but if the share price falls, the stop loss price doesn't change. That method allows the investor to set a limit on the maximum possible loss without setting a limit on the maximum possible gain, and without requiring paying attention to their investment on an ongoing basis.”

Fixed percentage and fixed value are only two versions of the trailing stop. This week’s series of articles examine different ways of applying a trailing stop to protect profits.

We'll chat again soon ...

Copyright 2006 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
eMail me Comments