trailing stop loss

[sulaiman altahhan]

Hi team, I would suggest that the EA’s should have trailing stop loss where we can protect the profit properly. for example yesterday the EA USDJPY M15 #1599046594, TP set as 90 pips however the price reached around 85 and returned back so in such of cases the trailing stop loss it is so useful.

[Alan Northam]

Hi Sulaiman,

The other side of your argument goes like this: Suppose price moved to half of the take profit target, reversed back in a downward direction, hit the trailing stop for a profit, and then price moved back upward and continued on to surpass the original take profit price. What happened in this hypothetical example is that the trader would have received half the profit instead of the full profit. This hypothetical example can happen in reality because all EA’s will go through drawdowns, and if the trailing stop is set too tight then the positions would be closed during a drawdown instead of allowing price to complete the drawdown and then continue in the profitable direction and hit the price target. If the trailing stop is set too loose so as to not close out a position during a drawdown then perhaps the trailing stop is of no value. When the EA’s are created the take profit and stop loss price points are determined to allow for the optimum profit and minimum losses based upon the historical data. As a result, statistically, over the long term, it is more profitable to allow trades to complete their drawdowns and continue on to hit their profit targets while occasionally taking a loss.

Alan,

[Konstantinos Borsis]

I agree with Alan 100%. I have been a trailing stop advocate for very long time until recently. And yes it is far better to allow the trade play out completely. Yes some of the trades will be lost but overall you would be more profitable. What you can do in case you get nervous, is set up an alert on a specific profit level and if hit check manually to decide if you want to close the position there or keep an eye and close it later. Personally if the price is above 80% I would close the trade manually and live to fight another day. 😊

[Konstantinos Borsis]

I agree with Alan 100%. I have been a trailing stop advocate for very long time until recently. And yes it is far better to allow the trade play out completely. Yes some of the trades will be lost but overall you would be more profitable. What you can do in case you get nervous, is set up an alert on a specific profit level and if hit check manually to decide if you want to close the position there or keep an eye and close it later. Personally if the price is above 80% I would close the trade manually and live to fight another day. 😊

[Konstantinos Borsis]

I agree with Alan 100%. I have been a trailing stop advocate for very long time until recently. And yes it is far better to allow the trade play out completely. Yes some of the trades will be lost but overall you would be more profitable. What you can do in case you get nervous, is set up an alert on a specific profit level and if hit check manually to decide if you want to close the position there or keep an eye and close it later. Personally if the price is above 80% I would close the trade manually and live to fight another day. 😊

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