Trailing stop not effectual. | Forex Factory

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Trailing stop not effectual.

  • #1
  • First Post: Jul 8, 2008 4:03pm Jul 8, 2008 4:03pm
Hello,
While backtesting my EA, I find that the level of the trailing stop has no or little effect on the profitability over any given time period (holding all other variables constant).
I haven't been able to figure out why this is, and was hoping someone might guide me here.
Thanks
Attached File(s)
File Type: mq4 Simple_MA_cross-trailstop-0.01.mq4   5 KB | 282 downloads
  • #2
  • Jul 8, 2008 5:09pm Jul 8, 2008 5:09pm
i've heard of effective but never effectual.

ps) who ever said trailing stops would increase profit?
  • #3
  • Jul 8, 2008 5:10pm Jul 8, 2008 5:10pm
a product of my president.
  • #4
  • Jul 8, 2008 6:59pm Jul 8, 2008 6:59pm
Hello,
tdion: http://www.answers.com/main/ntquery?s=effectual&gwp=13
I grew up in India, and so I use British English most of the time (my friends here in Canada still aren't quite used to it yet).
Trailing stops would affect profits; thats why they are used in the first place. For example, (assuming we are going long) if the price goes up by 10 pips and the trailing stop is set to 5, the trade would close at 5 pips profit. If the trailing stop were set to 2, however, the trade would close at 8 pips profit (assuming the price moved straight to 10 pips profit).
Therefore, trailing stops do affect profits.

lucidlamp: I don't really understand, sorry.

So, if anyone knows what is wrong with my EA, I'm still waiting and hoping.

Thank you.
  • #5
  • Jul 8, 2008 7:21pm Jul 8, 2008 7:21pm
ravster,

The code is not correct.

Upon opening an order the StopLoss is set to 20 pips. Then the trail is set to 10 pips. So the position has to reach a 10 pip profit for the trailing stop to begin working? Then is trails by 10 pips? I am a bit confused as to exactly how you plan to trail.

lucidlamp

ps: disregard the president comment, its my dry humor.
  • #6
  • Jul 8, 2008 7:24pm Jul 8, 2008 7:24pm
the trailing stop does not necessarily give you more pips in the long run. sometimes it will, sometimes it won't.
  • #7
  • Jul 8, 2008 7:48pm Jul 8, 2008 7:48pm
Hello lucidlamp,
Yes, that is exactly correct. The trailing stop should start working once the trade has 11 pips of unrealized profit, locking in 1 pip of profit. After that, the trailing stop should follow the trade at a distance of 10 pips (in the direction of the profit).
Thanks
  • #8
  • Last Post: Jul 9, 2008 6:58am Jul 9, 2008 6:58am
this is what I used to code on your scenario of Trailing Stop function (applying to your trail stop function):

add 1 more parameter if you like, exp. "TSplus"

Inserted Code
extern int TSplus = 1; // additional profit pips before it strat trail

void trail_stop()
{
   if(TrSL > 0)
   {
      switch(OrderType())
      {
         case OP_BUY:
            if(Bid-OrderOpenPrice()>Point*TrSL) 
            {
               if(OrderStopLoss()<Bid-Point*(TrSL+TSplus)) // additional here
               {
                  OrderModify(OrderTicket(),OrderOpenPrice(),Bid-(Point*TrSL),0,0,Blue);
               }
            }
         case OP_SELL:
            if((OrderOpenPrice()-Ask)>(Point*TrSL))
            {
               if(OrderStopLoss()>Ask+Point*(TrSL+TSplus)) // additional here
               {
                  OrderModify(OrderTicket(),OrderOpenPrice(),Ask+(Point*TrSL),0,0,Red);
               }
            }
      }  //End switch(ordertype()).
   }  //End check for TrSL > 0.
}
Anyway. it just an example to put "TSplus" pips on your profit saving.
Keep your hands up, and use your pant! - FxMatics
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