Agreed... I've not come across any implementation for trailing stops that has better results in the long run. I can't even find an initial stop that improves the performance of the system I use (its quick in and out looking for the first part of the turn). One solution I use for the "give back" is to identify the average run up and the 1 standard deviation of that run up and set an alert to sell options OTM against that position. This way I have something paying for the likely turn, but still have room to run.
Has anybody found trailing stops help trend following strategies?
I come out of half the position at 1:1 and the other profit target is 3:1 or 4:1 depending on the consolidation prior to the breakout and quality of the breakout (if price action is confirmed by indicators etc..). Also my trailing is that if after reaching the first target the market reverses back and closes below 20 ema, then we exit at the next bar.
Of course leaving a profit target does limit profits as you may not catch the big big moves, but for day trading, I found the above gives the best results.
Of course leaving a profit target does limit profits as you may not catch the big big moves, but for day trading, I found the above gives the best results.
in general trailing stops are no good to increase profit over the long run, they are good to increase the chance of being profitable at a given point in time.
in other words, they are for clients who wants to be in the green more than they want to be greener.
in other words, they are for clients who wants to be in the green more than they want to be greener.
Darksorrow
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I am using TS in my trading. It is true that not all the times TS will work. My SL is 75 pips & i put TS to 75 pips as well. After my trade reaches BE i use 150 pips TS if i want to keep the trade for a longer period of time. Sometimes it results and sometimes it hits SL. I would say there needs to be a after trade entry analysis whether one should use TS or not.
A trend follower who doesn't use trailing stops...now i've heard it all!
Why? Donchian& keltner are both examples of the trailing stop embedded inside the system. I'm sure that's what the thread starter meant
A quote by an experienced trading coach and vendor that was quoted by another experienced trading coach made a lot of sense to me : The only reason to get out of a trade before your target or your stop is hit is when the reason for being in a trade in the first place is no longer valid."
For my 2 cents worth , the best trader I ever saw live in a chat room told me that the best way to test your sytem is to first see how your trades do exiting with your existing rules. But then test them with several different exits. First being to hold until end of day! Then he said you could try all kinds of other exits such as waiting one bar more or getting out one bar sooner and see how it shows up in results after a month of day trading. If it works, keep backtesting it until you trade only that way with confidence. He said emp[hatically...........the bigpgest trade winning traders make that turn them into losers is to change their criteria for getting out of a trade in the middle of the trade!" No one in the room in 6-9 months I was there ever proved him wrong.
For my 2 cents worth , the best trader I ever saw live in a chat room told me that the best way to test your sytem is to first see how your trades do exiting with your existing rules. But then test them with several different exits. First being to hold until end of day! Then he said you could try all kinds of other exits such as waiting one bar more or getting out one bar sooner and see how it shows up in results after a month of day trading. If it works, keep backtesting it until you trade only that way with confidence. He said emp[hatically...........the bigpgest trade winning traders make that turn them into losers is to change their criteria for getting out of a trade in the middle of the trade!" No one in the room in 6-9 months I was there ever proved him wrong.