In this article we will take a closer look at trailing stop loss – what it is, how to use it. You can easily use this with others trading tools or based your whole trading plan around it. We will see how to do it.
This is more advanced material – I assume that you have some knowledge what price action is, how to use averages or oscillators. Anyway, I try to keep things simple.
MATERIALS – YOUR TRADING TOOLS
In my trading toolbox you can find indicators and templates which I use in my trading. Template names start with atr_. If there will be a problem with installation, let me now.
TRAILING STOP LOSS – WHAT IS IT
Trailing stop is a very good tool, when you have problem with closing positions. It is presented as a line which is away from current price. For a long position this line is below price and for short position it is above price. The distance between stop line and price is based on ATR indicator.
The biggest advantage of trailing stop loss is that it takes away emotions from closing positions. We are talking here about two kinds of situations: (more…)