Hard stop vs trail stop?

Discussion in 'Trading' started by mdszj, Nov 27, 2010.

  1. mdszj



    I am trading TNA/TZA using a mechanical swing system that employs daily close data. My stop loss currently consists of a 2-day "time stop" where I dump the etf after 2 days of lower closes. I also recently added a hard stop of 10% to the system strategy, although based on trade history, I do not expect the 10% stop to be activated very often.

    I am trying to determine whether I should use a 10% trailing stop instead of the 10% hard stop. DOes anybody have any comparison info between these 2 stops? I am figuring the answer is actually very case by case, but figure it is worth asking about. Any thoughts appreciated.
  2. what about a profit target with a trail after profit target is reached?

    @ entry you have profit target with hard stop, once PT is reached then trail at whatever you would like.
  3. mdszj



    I actually forward tested this strategy originally using 2 lots, or batches. The first lot had a 5% profit target, and the second lot continued until the end of trade signal. I decided to only use the end of trade signal since the 5% target did not give nearly as good results. However, there may be some benefit to introducing a trail at a certain profit point. Will consider, thx for the reply. I have already decided to forward paper test each trade using a 10% trail stop to see what happens.

    I am especially interested in seeing if anybody has ever directly compared these 2 stops, or if there is any research or white papers on them.