sorry newbie question. How does the trailing stop works? For what purpose?
Thanks in advance
Thanks in advance
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Quoting stonieDislikedsorry newbie question. How does the trailing stop works? For what purpose?
Thanks in advanceIgnored
Quoting jariusDislikedTrailing stops work differently based on the broker/platform.
Some trail in increments (15 pip trailing stop only moves the stop after the price has moved 15 pips in a given direction. it moves again after another 15 pips), others are pip-for-pip trailing stops (stop moves each time price moves one pip in a given direction, keeping the stop a fixed maximum number of pips away from the current price).
Some brokers have trailing stops that work on the server. Others (metatrader based brokers for example) work on the client end, meaning you turn off your system, and the stop stays where you left it last.
In some cases a trailing stop means you manually move your stop up when you want to reduce risk/lock in profits, as some brokers don't support trailing stops on their platform.
The last distinction I can think of now is that there are a couple of brokers that allow you to set trailing stops but, until price has moved in a given direction by the trail distance, you won't have a stop on your order unless you set a separate stop. So you buy at 1.2235 with a 15 pip trailing stop. IF price then drops 100 pips, you won't be stopped out, but if price moves to 1.2250, you'll then have a stop at 1.2235. If, instead you set a manual stop at 1.2200, when price moves to 1.2250, the stop moves to 1.2215 (not 1.2235).
As each broker may have different methods for trailing stops, it's important to check the broker's documetation and find out exactly how their trailing stops work.Ignored
Quoting stonieDislikedThank you so much for ur time. Now i have a better picture of itIgnored