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trailing stop question - equities
Posted: Mon May 31, 2004 2:39 pm
by billpritjr
Wanted to put this out to audience
For those of you who trade stocks, how are you deciding your trailing stops?
ATR ? As in 2 times ATR, etc
A short term MA?
price channels/N-day breakdown?
Gut feel?
thanks
Posted: Tue Jun 01, 2004 8:07 am
by PeterK
For swing trading of 2-3 days, I use whichever of (yesterdays Low) or (yesterdays' close - 25% of ATR(20)) is the greater (for Long trades).
For medium term or longer systems, I generally use a similar mechanism with the ATR factor being larger, and/or an ATR multiple calculated from the highest high during the trade.
Peter
Posted: Mon Jul 12, 2004 4:07 am
by Gherkin
I am working on the same thing and finding mixed results. I am trading trends in stocks buying options as my vehicle for leverage. Parabolics are too short and even 2 ATR's can be too big... Grrrr!!! I have been looking at an initial tight stop (0.5 ATR) and then moving to 2 ATR once it's moved 2 ATR's from the THEORETICAL entry price. i.e. sometimes if it gaps above my entry I still gotta take the trade, but my risk is larger. In short, I think a combo is gonna be the right mix, but I'm open to almost any idea.