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Daily BTC 4HChart - targets and stoplossHello everyone, let's look at the BTC to USDT chart on a 4-hour timeframe. As you can see, the price is moving below the local downtrend line. Let's start with setting targets for the near future that we can take into account: T1 = 25401$ T2 = 25579$ T3 = 25806$ and T4 = 26469$ Now let's move on to the stop loss in case of further market declines: SL1 = 25107$ SL2 = 24861$ SL3 = 24660$ and SL4 = 24456$ Looking at the CHOP indicator, we see that the energy has been used, the MACD, despite the price increase, remains in a downward trend, while the RSI has a visible rebound, we still have room for the price to overcome the current resistance.
COINBASE:BTCUSD
by cryptodailyuk
BTC/USDT 4H - Targets and StoplossHello everyone, let's take a look at the 4H BTC to USDT chart as you can see that the price has moved up from the local downtrend channel. Let's start by setting goals for the near future that we can take into account: T1 = $26,132 T2 = zone from $26383 to $26626 AND T3 = $26970 Now let's move on to the stop loss in case the market goes down further: SL1 = $25,951 to $25,655 zone SL2 = $25413 AND SL3 = $25,178 Looking at the CHOP indicator, we see that there is a lot of energy on the 4H interval, the MACD indicates a local uptrend, and the RSI is moving sideways around the middle of the range, which makes it difficult to clearly choose the direction of movement.
by cryptodailyuk
Preserving Your Capital Like A ChampIn the world of trading, effective trading capital management can mean the difference between success and failure. We cannot stress enough how critical this aspect is to long-term success. Today we will delve into the importance of managing your trading capital, the various strategies employed by many successful traders, and how you can implement these techniques to safeguard your investment and maximize profits. Understanding the Importance of Trading Capital Management Trading capital refers to the amount of money allotted for the purpose of trading your desired market. Proper management of trading capital is crucial for traders, as it helps them minimize losses and in turn, maximize profits. In essence, trading capital management is all about striking the right balance between taking risks and preserving your hard-earned money. One key aspect that differentiates successful traders from gamblers is their mindset. Gamblers tend to chase big wins, hoping for a life-changing payout, while traders focus on consistently generating small, predictable returns over the long term. Don’t get us wrong, big wins can and do happen, and they feel great when they do. Think of trading as a really long boxing match. It's rare and impractical for a boxer to believe they can knock out their opponent by flying out of a corner with no defense and going straight for a haymaker each time. The foundation for success takes many consistent jabs, and an unwavering defense, much like trading. Traders who want to be long-term successful will prioritize risk management and capital preservation, ensuring that they can continue trading even after incurring losses so they can pursue consistent profits. The Struggle is Real For New Traders New traders often find difficulty in managing their trading capital effectively. This is primarily due to their focus on making profits rather than minimizing risks. The desire to make money can lead to taking unnecessary risks, which can result in significant losses. It is crucial to remember that every loss must be recovered through a profitable trade to regain lost ground. So why not implement strategies that mitigate that lost ground in the first place? Strategies To Adopt for Long-Term Success So, what are some of the techniques that successful traders use to optimize their chances of consistent profits in the markets? Here are a few suggestions to improve your trading capital management: Implementing Stop-Loss Orders Always trade with a stop-loss. There are countless ways to implement a stop-loss, and we covered this in great detail in a previous article that is linked below. A stop-loss order allows you to specify a price at which your trade will be automatically closed if the market moves against you. This is the most practical and easily enactable capital management technique you can use. Some would consider trading without a stop-loss to be one of the cardinal sins of trading, as it prevents you from managing risk effectively. Utilizing Reward Risk Ratios (RRR) Every trade carries the risk of making a loss. Successful traders assess their potential trade risk and potential reward before entering a position. Utilizing reward-to-risk ratios may seem complicated, but it doesn't have to be. Many traders will often aim for a reward that is twice their risk or a ratio of 2 to 1. So in theory for every $1 you risk you aim to make $2 in profit. Your RRR can also help you understand what your theoretical minimum win rate would need to be a profitable trader. Utilizing this information is very handy when backtesting and forward-testing your strategy. In the early stages of a trader's journey, we highly recommend to keep a trading journal to keep track of these metrics. Keeping track of your wins and losses and keeping your RRR consistent offers deep insight into whether you are on the right path to consistency. Managing Your Money How much capital are you risking per trade? It's difficult to predict which trades will be profitable, but it's essential to risk a consistent amount on every trade. Coupled with an appropriate risk-to-reward ratio, this approach can help protect your trading account. For example, consider risking only 1-2% of your total trading portfolio on each individual trade with a maximum overall of 10% among your trades. This may not seem like much, but if you can remain disciplined with your stop losses and RRR you greatly increase the odds of success. If you have a small account don’t sweat it. It will help you grow that account size and compound those gains in a stable fashion that would outlast the method of throwing your entire account into each trade. Hedging Holding long and short positions on various assets in different sectors can help protect against any aggressive moves that affect the market as a whole. For instance, if there was a sudden 'flash crash,' the traders who solely went long would experience a loss or a potentially significant loss without proper risk mitigation. However, if you held both long and short positions, you could have made profits to offset the losses. Obviously, market events are hard to account for, but hedging can be a useful capital preservation strategy. Focusing on a Single Asset to Limit Risk Exposure Some traders prefer to concentrate on trading one asset to minimize risk exposure. This can be effective, especially when the trader has in-depth knowledge of the specific asset being traded. The potential downside is that this can limit your trading opportunities, but we highly advise this approach for new traders. Focusing on one asset can help you grow your experience and hone your strategy through a rigorously disciplined approach. Consistency in Risk and Money Management There is no one-size-fits-all approach to trading, and that's part of the beauty of it all. A strategy that works for one trader may not work for another. The key to improving your trading strategy is to adopt a disciplined approach to risk and money management. While this approach may not be as flashy as some in the trading community portray, consistently minimizing risk is an essential aspect of enhancing overall profitability and is a massive attribute to long-term success. Final Thoughts on Trading Capital Management Effective trading capital management is crucial for success in the world of trading. By adopting a disciplined approach to risk and money management, traders can minimize losses, maximize profits, and safeguard their investments. The techniques discussed – implementing stop-loss orders, utilizing reward-to-risk ratios, managing money, and diversifying trades – are all essential components of a successful trading capital management strategy. Remember, the key to success in trading lies not in chasing the knockouts but rather by consistently landing the jabs while maintaining a stout defense. By following these strategies adopted by long-term, successful traders and focusing on preserving capital, you can improve your chances of obtaining that same long-term success in the markets.
NASDAQ:MSFTEducation
by LeafAlgo
BNB/USDT 4HInterval Targets and StoplossHello everyone, let's look at the BNB to USDT chart on a 4-hour time frame. As you can see, the price is moving above the local downtrend line. Let's start by setting goals for the near future that we can take into account: T1 = $240.7 T2 = $244.5 T3 = $247 T4 = $251 AND T5 = $255.5 Now let's move on to the stop loss in case the market goes down further: SL1 = $231.8 SL2 = $221.9 SL3 = $214.3 AND SL4 = $206.3 Looking at the CHOP indicator, we see that there is still energy to continue the move, MACD indicates a local uptrend, while the RSI has been moving below the lower border for a long time and now we are approaching the middle of the range with room for further growth.
by cryptodailyuk
Developing a Trading Plan: 7 Key Aspects to Consider Becoming a successful trader requires more than just simply buying and selling assets. To be consistently profitable, traders must create and stick to a well-designed trading plan. A trading plan is a detailed document that outlines a trader's approach to the market and establishes rules for each step of the trading process. The following are seven key aspects that a trading plan should include. ✅Timeframe The timeframe determines the length of time each position will be held open. Traders can choose a long-term, medium-term, or short-term trading strategy. Long-term strategies may require holding a position for several months, while short-term strategies require closing a trade within a day, or even just a few minutes. ✅Risk Management Risk management is the process of identifying, assessing, and prioritizing risks or uncertainties that may affect trading outcomes. A trader's risk management strategy may involve using a fixed lot size or a percentage of the account for each trade. With proper risk management, traders can reduce their losses and maximize their profits. ✅Market Conditions Market conditions refer to whether the market is trending or ranging. A trending market is one in which prices move persistently in one direction, while a ranging market is one in which prices move sideways between a range of support and resistance levels. A trader should have different strategies for each type of market condition. ✅Choosing the Market to Trade Traders must choose which market they want to trade, based on their trading plan, resources, and experience. Forex, stocks, commodities, and cryptocurrencies are some of the markets that traders can choose from. It is advisable to trade in markets that a trader understands and has experience in. ✅Where to Enter Traders can use different methods to enter a trade, such as pullbacks, breakouts, or crossovers. A pullback is a temporary reversal in the direction of an asset's price movement. A breakout occurs when an asset's price moves through a support or resistance level, and a crossover is when two moving averages cross over each other. ✅Stop Loss A stop loss is an order placed with a broker to buy or sell a security when it reaches a certain price. Traders can use percentage-based or market structure stop-losses. A market structure stop-loss is set at a support or resistance level and is based on the analysis of market structure. ✅Targets Traders can have fixed or trailing targets. Fixed targets are predetermined profit objectives that are fixed in advance. Trailing targets are profit targets that move along with the price of the trade as it goes in the trader's favor. In conclusion, developing a trading plan is an essential step for every trader. It allows traders to make informed decisions based on their analysis, experience, and personal risk tolerance. It's important to review and adjust the plan regularly based on market conditions and changes in personal goals and financial conditions. By adhering to a trading plan, traders can improve their chances of success in the market. I hope this post was helpful to some of our beginner traders😊 Dear followers, let me know, what topic interests you for new educational posts?
BITSTAMP:BTCUSDEducation
by SignalProvider
10
SOL/USDT targets and stoplossHello everyone, let's look at the SOL to USDT chart on a 4-hour time frame. As you can see, the price is moving below the local uptrend line. Let's start by setting goals for the near future that we can take into account: T1 = $19.89 T2 = $20.40 T3 = $20.84 T4 = $21.26 AND T5 = $21.89 Now let's move on to the stop loss in case the market goes down further: SL1 = $19.45 SL2 = $19.07 SL3 = $18.67 AND SL4 = $18.12 Looking at the CHOP indicator, we see that the energy is recovering, the MACD indicates the continuation of the local downtrend, while the RSI is approaching the lower limit, which in the coming hours may give the price an upward rebound.
by cryptodailyuk
LTC/USDT 1DInterval Targets and StoplossHello everyone, let's look at the LTC chart on the one day time frame. As we can see, the price is still above the uptrend line. Let's start with setting targets for the near future that we can take into account: T1 = 89,13$ T2 = 92,33$ T3 = 94,98$ T4 = 97,54$ and T5 = 101,28$ Now let's move on to the stop loss in case of further market declines: SL1 = 83,56$ SL2 = 80,14$ SL3 = 75,28$ and SL4 = 69,44$ The CHOP index indicates that there is still energy for movement, the MACD indicates the uptrend is maintained, while the RSI, despite a strong rebound, still takes place for the price to go down to the previously mentioned support areas.
by cryptodailyuk
XRP/USDT 1DInterval Targets and StoplossHello everyone, let's look at the 1D XRP to USDT chart as you can see that the price is moving above the local downtrend line. Let's start by setting goals for the near future that we can take into account: T1 - $0.55 T2 - $0.59 AND T3 - $0.64 Now let's move on to the stop loss in case the market goes down further: SL1 - $0.50 SL2 - $0.48 SL3 - $0.46 SL4 - $0.44 AND SL5 - $0.41 Looking at the CHOP indicator, we see that the energy has been used, the MACD confirms the ongoing uptrend, while the RSI is at the upper limit, which may affect the change of the trend to the downside.
by cryptodailyuk
EDUCATION: Hedging vs Stoploss Some rookie traders frequently trade without a stop loss because they think they can avoid being stopped out by market swings or rollover. However, if the market moves against them, this technique could result in severe losses. In this article, we'll cover why trading without a stop loss is a bad idea and how stop losses can be used efficiently or, as an alternative, how to employ hedging techniques. What is a stop loss? A stop loss is an order that you place on your trading platform to automatically close your position at a certain price level if the market goes against you. For example, if you buy EUR/USD at 1.2000 and set a stop loss at 1.1950, you are limiting your potential loss to 50 pips if the price drops below that level. A stop loss can help you control your emotions and prevent you from holding on to losing trades for too long, hoping that the market will turn around. There are several reasons why trading without a stop loss is a bad idea, such as: 🔹 You expose yourself to unlimited risk. Without a stop loss, you have no exit plan and you are relying on your gut feeling or luck to close your trade at the right time. However, the market can be unpredictable and volatile, and sometimes it can move hundreds or thousands of pips in a matter of minutes or hours. If you don't have a stop loss, you can lose more than your initial investment and even end up with a negative balance in your account. 🔹 You increase your stress level. Trading without a stop loss means that you have to constantly monitor your positions and worry about every pip movement. This can be very stressful and exhausting, especially if you have multiple trades open at the same time. You may also experience fear, greed, anxiety, anger, frustration, and other negative emotions that can cloud your judgment and affect your trading performance. 🔹 You reduce your profitability. Trading without a stop loss can also reduce your profitability in the long run. By not cutting your losses short, you are letting them eat into your profits and reduce your win rate. You may also miss out on better trading opportunities because you are too focused on your losing trades or afraid to open new ones. Additionally, you may incur higher trading costs due to wider spreads, commissions, swaps, and slippage. How to use stop losses effectively? Effectively utilizing stop losses will help you increase your trading profits and stay away from the risks of trading without one. The following advice will help you use stop losses effectively: 🔹 Determine your stop loss level using technical analysis. You can use a variety of technical tools and indicators, including as support and resistance levels, trend lines, Fibonacci retracements, moving averages, volatility indicators, etc., to pinpoint areas where the market is expected to reverse or rebound. Depending on whether you are going long or short, you should set your stop loss just below or just above these levels. 🔹 Use risk management rules to determine your position size. You should always calculate how much money you are willing to risk on each trade and adjust your position size accordingly. A common rule of thumb is to risk no more than 1% or 2% of your account balance per trade. This way, you can limit your losses and preserve your capital for future trades. 🔹Use trailing stops to lock in profits. A trailing stop is a type of stop loss that moves along with the price as it goes in your favor. For example, if you buy EUR/USD at 1.2000 and set a trailing stop of 20 pips, your stop loss will move up by 20 pips every time the price moves up by 20 pips or more. This way, you can protect your profits and let your winners run. NB: In related ideas I have attached my publication on trailing stop loss and support and resistance for those who would like to know more on those topics If a trade is having a hard time using stop losses what they can do as an alternative is hedge there position. Similar to how stock traders will use stock options to hedge their risk in the markets. What is hedging ? Hedging is a trading strategy that involves opening a position opposite to an existing one, in order to reduce the risk of loss from unfavorable price movements. For example, if you are long on EUR/USD, you can hedge by opening a short position on the same currency pair. This way, if the price goes down, you can offset some or all of the losses from your long position with the profits from your short position. Why this and not a stop loss ? The reasons someone would do this is because a stop loss can be triggered by temporary price fluctuations that do not reflect the true market direction. This can result in premature exits and missed opportunities. Moreover, stop loss can expose you to slippage and gaps, which are situations where the market price jumps over your stop loss level and executes your order at a worse price than expected causing you to loss more that you anticipated. hedging your position protects you from those situations. By hedging, you can keep both positions open until you are confident about the market direction and close the losing one when the price starts trending in your direction again. Things to note: Though you have positions opened in both directions and in theory you should not lose any additional funds once you've initiated the hedge it is worth noting that you can still have fees both positive and negative from swap fees at rollover depending on the direction and the asset you are trading. I will be doing a post soon on heading as a stop loss as a standalone topic and also swaps and rollover.
Education
by ChristopherDownie
37
BTC/USDT short-term Targets and StoplossHello everyone, let's take a look at the 4H BTC to USDT chart as you can see that the price is moving right at the local downtrend line. Let's start by setting goals for the near future that we can take into account: T1 = $27,112 T2 = $27,475 T3 = $27,780 AND T4 = $28089 Now let's move on to the stop loss in case the market goes down further: SL1 = $26,783 SL2 = $26,493 SL3 = $26,257 AND SL4 = $26,036 Looking at the CHOP indicator, we see that there is a lot of energy for a new move, the MACD is on the verge of entering a local uptrend, while the RSI, after recovering, has a small increase with room for the price to go a little higher in the coming hours.
by cryptodailyuk
1
MATIC/USDT 1DInterval - Targets and Stop lossHello everyone, let's look at the MATIC to USDT chart on a one-day time frame. As you can see, the price is staying above the local uptrend line. Let's start with setting the support line and as you can see the first support on which the price is currently based is $0.89, if the support is broken then the next support is $0.87, $0.84 and $0.81. Now let's move to the resistance line, as you can see the first resistance is $0.91, if you manage to break it, the next resistance will be $0.93, $0.95 and $0.97. Looking at the CHOP indicator, we see that there is some energy left for the next move, the MACD remains in an uptrend despite the correction, while the RSI has a small rebound, but there is still room for the price to go lower.
M
by cryptodailyuk
4
Stop Losses: A Trader's Best DefenseIn a perfect world, every trade would go our way, but alas this is usually not the case. A stop loss is a risk management tool used by traders and investors to minimize their losses when trading. It is a predetermined price level at which a trader's position will automatically exit the market, causing the loss to be realized. Stop losses are crucial to any trading strategy, as they help traders limit their losses and stay disciplined. In this blog, we will look at what stop losses are, why they are important, how to set realistic stop losses, and five different examples of stop losses with a description of how to set the stop loss. What are Stop Losses? A stop loss is an order to sell a security when it reaches a particular price. It is a predetermined price level at which a trader's position will automatically exit the market, causing the loss to be realized. This means that if the price of the security falls to the stop loss level, the trader's position is automatically closed, and any losses incurred are limited to that level. Stop losses are essential because they help traders limit their losses and stay disciplined. Why are Stop Losses Important? Stop losses are important because they help traders limit their losses and stay disciplined. In trading, it is easy to become emotional and let your losses run. Stop losses help traders avoid this situation by automatically exiting the market when the price reaches a predetermined level. This ensures that losses are limited, and traders can move on to the next trade without being emotionally affected by the previous loss. Setting Realistic Stop Losses Setting realistic stop losses is crucial to any trading strategy. A trader needs to consider the volatility of the security, the trading style, and the risk-reward ratio when setting stop losses. The stop loss should be set at a level where the loss is acceptable but not too close to the current price level, as this may result in the stop loss being triggered prematurely. A stop loss should also not be set too far away from the current price level, as this may result in the trader losing more than they are willing to risk. Stop Loss Examples Below we will list five examples of setting effective stop losses. For consistency, we are going to use the same long stop loss example, but these same examples can be set for stop losses for short positions as well. Percentage-Based Stop Loss: A percentage-based stop loss is a stop loss that is set at a specific percentage below the purchase price. For example, if a trader wants to place a long at $0.088602 and sets a 0.5% stop loss, the stop loss would be triggered at $0.88160. For a short stop loss at 0.5%, you would add the value instead and have a 0.89035 stop loss. To set a percentage-based stop loss, the trader needs to determine the percentage they are willing to risk and place the stop loss order at that level. ATR-Based Stop Loss: An ATR-based stop loss is a stop loss that is set based on the average true range of the security. The average true range is a measure of volatility and is calculated by taking the average of the high and low prices for a particular period. To set an ATR-based stop loss, the trader needs to determine the number of ATRs they are willing to risk and place the stop loss order at that level. For a long stop loss, you would subtract the ATR times its multiplier from the current price. For a short-stop loss, you would add the ATR times its multiplier to the current price. The unique upside to this stop-loss style is the ATR accounts for market volatility which can aid your risk management and help set more appropriate stop losses. Using Moving Averages or Super Trend: Moving averages and super trend are technical indicators that can be used to set stop losses. Moving averages are calculated by taking the average price over a specific period, while the super trend is a trend-following indicator that uses the average true range to calculate the stop loss level. To set a stop loss using moving averages or super trend, the trader needs to identify the period and place the stop loss order at the appropriate level. The Moving Average or Supertrend can then act as a moving stop loss as it trails the price. 1. Moving Average: 2. SuperTrend: Donchian Channels: Donchian channels are a technical indicator that can be used to set stop losses. Donchian channels are created by taking the highest high and lowest low over a specific period and plotting them on a chart. To set a stop loss using Donchian channels, the trader needs to identify the period and place the stop loss order at the appropriate level. In the example below we use a more standard 20-period Donchian level to identify areas of lowest low interest that would be a good place for a stop loss. If we were setting a short order we would look to recent highest highs as potential stop-loss areas Conclusion Stop losses are crucial to any trading strategy, as they help traders limit their losses and stay disciplined. When setting stop losses, traders need to consider the volatility of the security, the trading style, and the risk-reward ratio. Stop losses can be set using many different techniques, including percentage-based, ATR-based, using moving averages or super trend, and Donchian channels. By setting realistic stop losses, traders can minimize their losses and stay disciplined, which is essential for long-term success in trading.
MEducation
by LeafAlgo
40
EOS/USD 1W. Basic trend. Potentials and manipulations.Here's the EOS/USD 1W Chart on Bitfinex(long history). Right now we can see the horizontal channel forming. In this channel harmonic pattern on daily TF formed and worked out the first target, which is the middle of this local horizontal accumulation channel, in terms of 1w TF. Now we're near the support of this channel 0.86$. Recently the big amount of EOS were deposited on the exchanges. Showed the classical potential manipulation - look. On the bottom we have the support zone. Also it's 0/61(16)$ zone which often acts as bottom. This 0.61$ zone is -25% from the current support which is basic percent for pulling out stop losses. Though, if the market gives an "opportunity" it can dump further. The global support is 0.5$. This is also a possibility. And if on the moment it's very scary - the price can drop up to 0.36, which is also -25% but from the main support 0.5$. It will be 0.36 $ zone. Still, the potential is very good. Shown the potential distribution(local distribution) zone on chart. Those are - 2.5$; 5$ and then maybe 15$ but probably not in this local cycle. You can potentially work martingale in this type of situation, which means buy more if price drops.
BITFINEX:EOSUSDLong
by TradingTsar
6
❗️USE STOP LOSS AND BECOME A BETTER TRADER❗️ 🟩STOP LOSS IS:A stop-loss order is an order that automatically closes a losing position once the price hits the pre-specified level. We usually calculate SL in pips, but there can be many ways to set it. It can be time based, percentage based or volatility based. For some investors SL is some piece of critical news, which alters their perception of the value of the asset. Regular stop losses can be many and varied too, for example trailing stop. Also, we sometimes move SL to entry after the half close to protect the gains and make our position risk free.However, all situations I listed above have one thing in common and it is the fact that the SL was used! 🟥Honestly, I am amused by the massive number of people who send me screenshots of their MT4 with several open trades on the same pair all of them without SL and with 90% of account lost. And they ask me what should they do? A great illustration of what is would take to recover from such a loss, is on the drawing above. With the 90% loss, you have only one tenth of the original account left. That means you need to make ten times more money than you have left just to recover your losses. 999% gain needs to be made just to have your old account back. It took you a day to blow it, and might take months to recover the losses. This is the brutality of the trading. The market is unforgiving and will punish you if you treat is without respect. If you are careless or if you make mistakes. The market always comes back to collect, waiting for the moment you drop your guard and relax for a second. Please always use Stop Loss, because, as it happens, it stops you from losing too much! I Hope you guys learned something new today✅ Wish you all Best Of Luck👍 😇And may the odds be always in your favor😇 Dear followers, let me know, what topic interests you for new educational posts?
BITSTAMP:BTCUSDEducation
by SignalProvider
7
Trailing Stop Loss Explained Trading orders known as "trailing stops" enable investors to control their losses while also perhaps locking in profits as a deal goes in their favor. An instruction to sell a security after it reaches a specific price is the same as a conventional stop-loss order, which is identical to a trailing stop. A trailing stop, on the other hand, has an extra feature that enables it to move with the security's market price rather than being fixed at a particular price. The stop-loss order will be triggered at a certain percent or dollar amount below the current market price when an investor sets a trailing stop. The trailing stop "trails" behind the market price of the security as it increases, retaining the same percentage or amount below the current price. The trailing stop stays in place if the market price drops further until it is activated by the predetermined percentage or dollar amount below the new market price. An investor may be able to secure their gains on a profitable trade by employing a trailing stop, as well as reduce their losses on a losing investment. It can be particularly helpful for traders who want to let their profits grow but also want to make sure they don't give back a significant portion of their earnings if the market swings against them. Technical analysis, which involves utilizing charts and indicators to examine historical price and volume data in order to spot patterns and make trading choices, is frequently used in conjunction with trailing stops. Several of the following indicators can be used as trailing stops: 🔹Moving Averages: The average price of a security over a given time period is calculated using moving averages. The stop loss can be set at a certain percentage or dollar amount below the moving average by traders who want to utilize moving averages as a trailing stop. The stop loss will go up with the moving average as the price of the security increases, helping to lock in profits. 🔹Technical indication known as the Parabolic SAR (Stop and Reverse) can be used to set a trailing stop. Based on the trend, it produces points on a chart that show where the stop loss should be placed. The SAR points get closer to the price as the trend continues, which can help safeguard gains and reduce losses. 🔹A technical indicator that gauges a security's volatility is called the average true range (ATR). By multiplying the ATR by a specific multiple (such 2 or 3), subtracting the result from the current price, traders can utilize the ATR to set a trailing stop. This will establish a stop loss that is modified based on the volatility of the security, assisting in protecting profits and limiting losses. 🔹Bollinger Bands: Bollinger Bands are a technical indicator that consists of a moving average and two lines that are plotted two standard deviations away from the moving average. Traders can use the upper or lower band as a trailing stop, depending on whether they are long or short on the security. As the price moves in the desired direction, the stop loss will move along with the upper or lower band, helping to lock in profits.
PEPPERSTONE:XAUUSDEducation
by ChristopherDownie
📈 The Trailing Stop Loss📍 What Is a Trailing Stop? A trailing stop is a modification of a typical stop order that can be set at a defined percentage or dollar amount away from a security's current market price. For a long position, an investor places a trailing stop loss below the current market price. For a short position, an investor places the trailing stop above the current market price. A trailing stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the investor’s favor. The order closes the trade if the price changes direction by a specified percentage or dollar amount. 📍Important Takeaways 🔹 A trailing stop is an order type designed to lock in profits or limit losses as a trade moves favorably. 🔹 Trailing stops only move if the price moves favorably. Once it moves to lock in a profit or reduce a loss, it does not move back in the other direction. 🔹 A trailing stop is a stop order and has the additional option of being a limit order or a market order. 🔹 One of the most important considerations for a trailing stop order is whether it will be a percentage or fixed-dollar amount and by how much it will trail the price. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
5