Trailing a stop loss
Getting out of a trade is just as important as entering one. Ideally you want to take advantage of most of the trend, so you don't want to get stopped out too soon and certainly not too late. Profit taking is a very personal topic though. Some traders will take it at horizontal support/resistance levels, others will set profit taking orders at specific percentages.
Within the TrendMaster system we have defined a few different ways of taking profit that we will explain in this guide. All of these are based on keeping a trailing stop and letting a strong reversal in trend stop you out of the trade. Some basic usage guidelines will be given, but it's ultimately up to the trader to find out which method best fits his/her trading strategy.
We distinguish between the following trailing stop methods within TrendMaster:
- Trailing a trade using candle bottoms
- Trailing a trade using Williams Fractals
- Trailing a trade using the ATR Ribbon