Trailing stop - how many pips?

Hello everyone.

I am always thinking about it and never have a good answer for it.

What is the optimal trailing stop?

When I'm riding a successful trade I don't want to get out fast. I want to ride it as long as possible.

I used to set trailing stop at 100 pips. However I am not sure about it. I got out of trades that kept going my way so it was too soon.

Generally I would say an optimal one does not exist. It's always a trade-off between either going for the home-runs by widening the stop or aiming for accuracy by setting it tighter.
On the other hand I believe an optimum might exist for a specific strategy with specific profit goals. I would ask myself what kind of price variation you would consider 'noise' on the main trend you're riding and what variation would clearly point to a reversal.

Hi,
Good question. There is no definitive answer and (among other things) rather depends on:
- what style of trader you are
- your attitude to open profits
- the nature of the market being traded

if you are a big trend follower you need to give trades a fair bit of room so as to be able to ride out 'natural' retracements. Coversely, scalpers would not be letting trades reverse much at all, first stalling and they are out.

Equally, some traders like to nail down decent open profits and would tighten stops aggressively once a trade is materially positive. Others might be OK to see much of it evaporate in the hope of a much bigger profit subsequently developing so would not so rapidly tighten stops.

Also, a volatile market clearly needs wider stops than a quiet one. Using a measure such as recent ATR is an effective simple way of adjusting stops appropriately in each market.

So, you need to think about your psyche, your method, your aims and your market to get to the right answer for you.