Trailing Stops

Discussion in 'Risk Management' started by Ken Mendenhall, Jun 10, 2008.

  1. I don't post hardly at all, but I read nearly every day. I have been using a 5% trailing stop with my swing trading. I am not able to monitor the market except at the end of the day. Lately I have been whipsawed out of my positions during a volitile day. Is there a way, with Schwab, to use the closing price instead of intraday? Any advice would be appreciated.
  2. I don’t know about Schwab, but why cant you just put in a hard stop and adjust it manually at the end of each day?
  3. Maybe that's the only way. I was looking for something automatic because of my unusual schedule.
  4. NoDoji


    I've had success with trailing stops but definitely got whipsawed on volatile stocks. I agree, stick with a hard stop and adjust it. For volatile swing trades, I often use conditional brackets with a hidden stop at max loss and an upper trigger based on a target profit.
  5. There are a lot more automatic-type options than just using tailing stops. Like you could use bracket orders where you have a sell-limit order up at your target, and a sell-stop down at your stop loss, and both would be set up to cancel the other if executed, or at least decrease the size of the other if one only partially fills.

    If you have actionable alerts that can submit or cancel new orders when the alert goes off, you could even wait for price to hit your target, and have an actionable alert start a tighter trailing stop up near your target, this way you can squeeze out some additional profits and not just sell early at the target if the stock has momentum.

    You should “talk to chuck” about conditional orders, OCA orders, actionable alerts, et cetera, there is a lot you can do assuming Schwab has the capability.
  6. NoDoji


    After seeing 3 direct access platforms in action, I've found Etrade to have excellent advanced order capabilities, including show/reserve qty.