T/P vs Trailing Stop | Forex Factory

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T/P vs Trailing Stop

  • #1
  • First Post: Feb 17, 2009 12:27pm Feb 17, 2009 12:27pm
Is there any reason why one would use a T/P instead of a relatively tight trailing stop? Take profit will guarantee X level of profit, whereas the trailing stop may in some instances may make you get stopped out and lose a little (the difference between the proposed T/P and trailing stop) BUT it leaves you with the potential to make more.
  • #2
  • Feb 17, 2009 12:42pm Feb 17, 2009 12:42pm
I've switched from TP to Trailing Stop over time. It gives you so many benefits. And they outnumber the Take Profit 100:1. The only problem with Trailing Stops is trailing it just enough that it has room to go lower without getting taken out by some small spike.
That's the art. Locking in profits as much and fast as possible without killing the trade.
  • #3
  • Feb 17, 2009 12:54pm Feb 17, 2009 12:54pm
I used to do a squeeze play. Through a lot of number running, I'd come up with a swing range. I wouldn't set a hard t/p order, but would trail stops and slowly get it tighter and tighter as price approached my t/p area. Then I'd analyze if a the end of run was emminant and then set a hard t/p and a put the trailing stop tighter and set it on auto.
  • #4
  • Feb 17, 2009 12:58pm Feb 17, 2009 12:58pm
Quoting JR97
I used to do a squeeze play. Through a lot of number running, I'd come up with a swing range. I wouldn't set a hard t/p order, but would trail stops and slowly get it tighter and tighter as price approached my t/p area. Then I'd analyze if a the end of run was emminant and then set a hard t/p and a put the trailing stop tighter and set it on auto.
That's a good strategy I do this to. Of course I have a level in mind where
I think price is likely to reverse. If we approach this level I will lock in even more and make it pretty tight. With a little bit of luck price will break that area and you can go on locking profits. If not your profit is almost as if you had set a TP at that level.
  • #5
  • Feb 17, 2009 1:03pm Feb 17, 2009 1:03pm
Quoting alyehoud
Is there any reason why one would use a T/P instead of a relatively tight trailing stop? Take profit will guarantee X level of profit, whereas the trailing stop may in some instances may make you get stopped out and lose a little (the difference between the proposed T/P and trailing stop) BUT it leaves you with the potential to make more.
I think it depends on your 'normal' expected TP range.

For instance: expected 'normal' small profits like a couple of PIPs I think trailing does not make much sense.
__Thanks__ MJ
  • #6
  • Last Post: Edited 1:31pm Feb 17, 2009 1:08pm | Edited 1:31pm
Quoting JR97
I used to do a squeeze play. Through a lot of number running, I'd come up with a swing range. I wouldn't set a hard t/p order, but would trail stops and slowly get it tighter and tighter as price approached my t/p area. Then I'd analyze if a the end of run was emminant and then set a hard t/p and a put the trailing stop tighter and set it on auto.
This sounds like a good way to use the trailing stop. It's almost like a hybrid of the standard trailing stop and a mental T/P. As Tjpld said, it definitely seems like an art that's perfected over time. I guess finding the magic spot where spikes miss the trail is the name of the game.

Also, thanks for the info. Just wanted a little confirmation of my suspicion
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