Best entry of trailing stops

Discussion in 'Risk Management' started by TylerD, Sep 14, 2008.

  1. TylerD


    I want to enter a trailing stop order to lock in a profit, but not wait until the stock has risen to enter the order that gives me my profit.

    Example of what I do today:
    10 AM buy @ $110
    11 AM get quote at $106; check news
    12 AM get quote at $111; lunch is served
    1 PM get quote at $114; time for tennis; sell.
    2 PM market zooms up, price goes to $119 when I'm unaware
    3 PM market gives back, price goes down to to $115
    3:40 PM news, price down to $95

    What I do now is sell immediately after I've locked in a profit and need to turn my attentions elsewhere. But I'd like to set a trailing stop so that it locks in a profit and does not get hit on the dips below my entry price.

    I want to catch most of the ride up to $119, and exiting at $117 on the way down would suffice.

    On E-Trade, I can enter a trailing stop order price as $ or %. But I cannot enter a $ trigger.

    eg1 Enter trailing loss '114 -2': exit at -$2 after stock hits $114

    I cannot enter a profit trigger.
    eg2 Enter trailing loss '+4 -2': exit at -$2 after stock hits $4 above my entry point.

    The only way I can see doing so is to wait until the market price the market rises, but if I know my limits in advance, I should be able able to enter them.

    Yes, I've read the thread on trailing stops vs money management.
  2. MYOM


    Some of the best trades happen at the extremes; extremely overbought or extremely over sold. You need an indicator to get you in and out of your trades such as my Predictor, which is based on the CCI. Stop loss orders guarantee a loss each time every time. If stop loss orders are kicking you out of your trades then a better entry and exit will fix that problem. In addition, learning how to read price action will help make your trades more profitable.

    Dan Clemons, author Manage Your Own Money