Say you enter a long position at some arbitrary level. Then you set a trailing stop to be triggered after +100 points and a stop loss at -100 points from entry level. However, the price went up to +80 points and then decline back to near breakeven level. What would you do now?
There are lots of missing vital information. I assume that your entry signal is good, and you didn't miss any prior signal. many traders tend to enter very late because they wait for all the 9 planets to be aligned before entering. by then, it is too late. your reaction 1 - those who choose this has too much negative emotion. you should consider stop trading. your reaction 2 - do this if you are supposed to enter with a bigger quantity but you failed to do it earlier. your reaction 3 - those who choose this have too much negative emotion. very soon, you have to top up your training account. you should seriously consider giving up trading totally. your reaction 4- that's the way to go !!!
When traders ask this question, most of the time they have hardly enough time of studying and little to none back testing. Unless you can have all the answers before the questions and done backtesting to show stats, giving a genetic answer is futile in my opinion. If you had 1000 occurrences of your question, you would have better idea of what you should do.
Backtesting is another topic and applies to whole trading system. Here I am addressing a basic component of a thought process. https://www.elitetrader.com/et/threads/backtesting-is-useless.346926/
Gee... that's kinda like Price TA! (Actually, not "kinda like"... it IS Price TA... except "1000 occurrences" aren't required... the correlations are more obvious than that.)
Why did you enter the trade and apply parameters if you were going to second guess the whole shebang?
I take the breakeven option. My number one priority is to protect capital. There is no downside to being out of the market.