Who is best ? stop loss or trailing stop | Forex Factory

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Who is best ? stop loss or trailing stop

  • #1
  • First Post: Dec 9, 2007 1:15pm Dec 9, 2007 1:15pm
Hi friends, Iam using james price action. If iam correct all people who are using james method using stoploss.(Using using hehehe i write and speak english in stupid way.) I want to know
(1)what is exact mean of trailing stop ?
(2)stoploss and trailing stop. Who is best amosg these ?
(3)when should we use it ?
(4)should it would be 5-10 or more ?
(5)How can i improve my strategy( sorry james16 price action) with trailing stop?
Please answer...........................................................
Iam waiting...............................................................

And again i want to say something. i always thanksful to all members who post or share their experience with me. A very special thanks to james and FF forum starter.
Let's trade together.
  • #2
  • Dec 9, 2007 2:08pm Dec 9, 2007 2:08pm
Practice makes perfect. I use neither, I keep mental stops and pull the trigger. Sometimes I will buy on the way up and in that case I will use stop to lock in some gains. Trailing stops are hard to use unless there is a sweeling long term move. Otherwise it's just a mater of time before they get hit and you miss out on some pips.
  • #3
  • Dec 9, 2007 2:38pm Dec 9, 2007 2:38pm
fixed stoploss
Trainee at UBS Investment Banking
  • #4
  • Dec 9, 2007 4:13pm Dec 9, 2007 4:13pm
I am not fond of trailing stops to be honest. I never managed to score better results with them.
  • #5
  • Dec 9, 2007 4:29pm Dec 9, 2007 4:29pm
trailing stop definition by investopedia:
http://www.investopedia.com/terms/t/trailingstop.asp

I use both of them. I never use automated trailing stops only manual trailing stops in trend continuation patterns
  • #6
  • Dec 10, 2007 2:41am Dec 10, 2007 2:41am
I think it is better i used them personaly. Many ea works good when trailing stop is added them. I still confuse but i thinks when i will apply this technique for 1 month on demo it would clear my all doubt.
Let's trade together.
  • #7
  • Dec 10, 2007 2:47am Dec 10, 2007 2:47am
Quoting FXBaby
Hi friends, Iam using james price action. If iam correct all people who are using james method using stoploss.(Using using hehehe i write and speak english in stupid way.) I want to know
(1)what is exact mean of trailing stop ?
(2)stoploss and trailing stop. Who is best amosg these ?
(3)when should we use it ?
(4)should it would be 5-10 or more ?
(5)How can i improve my strategy( sorry james16 price action) with trailing stop?
Please answer...........................................................
Iam waiting...............................................................

And again i want to say something. i always thanksful to all members who post or share their experience with me. A very special thanks to james and FF forum starter.


It depends on several things, mainly two things:

(1) Your Psychology
Are you risk averse? Or are you willing to take a loss or a scratch trade (break even) for a potentially bigger reward?

If you don't like losing, take a tighter stop.
If you are ok with giving space for a potentially larger reward, use loose stop.

(2) Statistical Edge
Immerse yourself in whatever your trading and mentally play out both scenarios (tight vs wide stop). Do you notice that price tends to "stagger" and "consolidate/range" before taking off? Then use an initially larger stop and then tighten it up as you the trade goes more into the green.

Does price take off almost immediately? Then move your stop to breakeven quickly.

Study the markets and see at what level this "taking off" tends to happen.


Sorry, but I am dead tired right now and I am gonna go to sleep. So my response may not be very clear/good.
  • #8
  • May 1, 2008 1:32pm May 1, 2008 1:32pm
Actually I place stops on rare occasions, mostly when price action heads in my direction and I want to go to a pizza...
Never used trailing stops and I prefer to feel the market before triggering any order; my trading style relies a lot on appreciation which is the opposite of maths so pre-defined levels don't mean that much, instead market feeling does.
  • #9
  • Edited 7:34pm May 1, 2008 1:53pm | Edited 7:34pm
Stoploss first, breakeven once in profit, lock-profit stop, let the rest run to at least 3 times as much as you put at risk when intially placing trade.
  • #10
  • May 1, 2008 9:48pm May 1, 2008 9:48pm
neither- trade with no stoploss.
  • #11
  • May 1, 2008 10:08pm May 1, 2008 10:08pm
Do you think stop and reverse make more sense?
  • #12
  • Jan 11, 2010 10:56pm Jan 11, 2010 10:56pm
Quoting TickJob
Do you think stop and reverse make more sense?
I thin stop and reverse have their place depending on your strategy. Generally, I would use an SAR when I am thinking the market could go iether way. To clarify with an example, USD/CAD has a pretty significant support level at the low from Oct 15 '09 at 1.0205 area. Say my trade idea is to buy at that price on the assumption there should be enough bids there to hold that level and see a nice bounce. That said, there is always the possibility that price just barrels through and keeps heading lower. So one could put a protective stop loss below at say, 1.0195 and additionally have a sell stop there as well.

I am not sure if this is a true SAR, but close enough, me thinks.

As for trailing stop losses, I have tried them a few times and have found they typically cost me pips as they got hit on a quick spike lower/higher, and then price continued in the original direction. Someone mentioned using manual trailing stops, and i wholeheartedly concur with that!

Hard stop losses are useful if you are not going to be able to babysit an open position and want to limit your risk of adverse movements against your position(s) while you are away. I typically don't like to leave open positions unattended, and prefer a mental stop, although if I am feeling a little anxious/excited I wil often throw on a hard stop loss to keep me away from jumping the gun, etc.

Like someone had also relayed, at the end of the day it relly depends on you and what you are comfortable with. Each to their own.

Cheers,

Veng.
  • #13
  • Edited 4:06pm Jan 12, 2010 4:17am | Edited 4:06pm
Quoting FXBaby
Hi friends, Iam using james price action. If iam correct all people who are using james method using stoploss.(Using using hehehe i write and speak english in stupid way.) I want to know
(1)what is exact mean of trailing stop ?
(2)stoploss and trailing stop. Who is best amosg these ?
(3)when should we use it ?
(4)should it would be 5-10 or more ?
(5)How can i improve my strategy( sorry james16 price action) with trailing stop?
Please answer...........................................................
Iam waiting..................................................................
Trailing stops are used by traders who don't understand the true capability of what they are trading (ie their method) - so proper methodology gives way to "let it run and see how far it goes..just in case it's a big one.."

Brokers are quite happy to give clients a trailing stop facility because they know this attracts more mediocre traders and/or the application of trailing stops will often dilute profits from otherwise profitable traders..

The more tools and indicators a broker can throw at a retail client the more likely the broker is to take away the retail client's money, who usually operates under the false assumption that more tools and indicators provide more "control," when in fact the opposite is usually occuring..

Which is best? It all depends, but I seriously doubt you'll find much use for a trailing stop. In fact I am yet to see a rational argument founded on solid data which favours the use of a trailing stop, other than that which benefits a broker of course. The alternative is to continue to develop your complete trading methodology and make sure you understand the full capability of that methodology - then all your questions are answered very clearly.. A fixed answer would be easier of course, (though not useful) but I suppose that's not the nature of the business we are in.

For what it's worth, for some of my trades I use a fixed stop loss, and for other trade types I don't use a stop loss at all, but a "stop time" if my total equity target is not reached first... these levels and times are fixed for a given trade, but are allowed to "evolve" over time based on the changing nature of that trading instrument and based on some simple seasonal and cyclical considerations (ie exploiting "capability"..) Yes, it all depends..
  • #14
  • Jan 12, 2010 4:29am Jan 12, 2010 4:29am
Quoting FXBaby
Hi friends, Iam using james price action. If iam correct all people who are using james method using stoploss.(Using using hehehe i write and speak english in stupid way.) I want to know
(1)what is exact mean of trailing stop ?
(2)stoploss and trailing stop. Who is best amosg these ?
(3)when should we use it ?
(4)should it would be 5-10 or more ?
(5)How can i improve my strategy( sorry james16 price action) with trailing stop?
Please answer...........................................................
Iam waiting..................................................................
Ther's not a "correct" answer. It depends on yor style and your understanding on the market. In ranging times, a trailing stop works better than a fixed SL. In trending markets, a fixed SL works better. So, it depends on you and your market reading capabilities. I use both.

PS: 5-10 pips TS will assure your profits to be partial and your losses to be full...

Cheers!
Many share my views with me. But I don't share them with them...
  • #15
  • Apr 9, 2010 3:01am Apr 9, 2010 3:01am
Quoting FXBaby
Hi friends, Iam using james price action. If iam correct all people who are using james method using stoploss.(Using using hehehe i write and speak english in stupid way.) I want to know
(1)what is exact mean of trailing stop ?
(2)stoploss and trailing stop. Who is best amosg these ?
(3)when should we use it ?
(4)should it would be 5-10 or more ?
(5)How can i improve my strategy( sorry james16 price action) with trailing stop?
Please answer...........................................................
Iam waiting..................................................................
What Does Trailing Stop Mean?
A stop-loss order set at a percentage level below the market price - for a long position. The trailing stop price is adjusted as the price fluctuates. The trailing stop order can be placed as a trailing stop limit order, or a trailing stop market order.

Also known as a Trailing Stop Order.

Stoploss minimizes your losses, triling stop moves the stoploss level. So if your order is profit, trailng stop moves stoploss fromm "-" to "+". end even your order will be closed by stoploss, it will "+". But it doesn't work when you are offline.
  • #16
  • Apr 9, 2010 5:18am Apr 9, 2010 5:18am
I guess you could call me a scalper. I use hard stops, trailing never seem to work for me or cut me out early.
"I made all my money by selling too soon"
  • #17
  • Apr 9, 2010 6:22am Apr 9, 2010 6:22am
Quoting Bleek
I guess you could call me a scalper. I use hard stops, trailing never seem to work for me or cut me out early.
Instant trailing stop works better if stop loss is at least 50 pips, if the distance is too small, it will be hit very soon without letting trade to breathe. No wonder that Jacko uses a trailing stop for his trading. There are not many great traders like he is among this comunity.
  • #18
  • Apr 9, 2010 6:29am Apr 9, 2010 6:29am
Quoting Saintsurfer
Instant trailing stop works better if stop loss is at least 50 pips, if the distance is too small, it will be hit very soon without letting trade to breathe. No wonder that Jacko uses a trailing stop for his trading. There are not many great traders like he is among this comunity.
I use a stop of around 10 pips, I'm about accuracy, I don't like trailing stops because they're not accurate and are a bit 'wishy washy'.

I've doubled two accounts in under two weeks so I guess I must be doing something right.
"I made all my money by selling too soon"
  • #19
  • Apr 9, 2010 7:17am Apr 9, 2010 7:17am
I place my stops usually at the end or mid point of the last candle. Previous candle is short I place the stop at the end of that candle and if the previous candle is long I place my stop at the mid-point of that candle.

As soon as 10 pips profit has been made I move my stops to break even. If price continues to move in my favor I'll adjust the stop accordingly.

I have try and like trailing stops but I notice I tend to get stopped-out fast using a trailing stop 25 pips back. But I do like trailing stops, it does the job for me, when it works.
  • #20
  • Apr 9, 2010 7:50am Apr 9, 2010 7:50am
Depends on how you trade. do you have wide stops? For me i dont use it that much because a few times price has brought me into profit then retrace a bit stop me out because the Trailing stop moved and then continue towards my TP afterwards so nah i dont like em.
"The market doesn't beat them, they beat themselves" - J. Livermore
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