I always use a trailing stop loss % of 15 to 20% when I'm up over 300%, which provides lots of room for volatility ... because, at that point, I don't care if I give up 17% when I know profits are already locked in to at least 283%. Thank you for well thought out articulate analysis.
I use trailing stops (as percentages) when I want to sell (take profit) on a winning position. So far I am not an options trader and hold the underlying stock.Today, I was trying to place an OCO buy order as my regular limit order did not fill. So clarifying this really helped me! Thank so much for putting this out here
Good job explaining your strategery! I was searching BUYING trailing stop orders and there isn't a lot of info to be found. Thus your title caught my search. I had a good chuckle as it is purely coincidental that I currently trade only in 3X leveraged ETF's (SOX's and LAB's). In any event, your back testing on selling with a trailing stop loss is interesting as that has been my experience as well, getting stopped out before I would have liked. Good stuff!
I was experimenting with trailing stops, which like you said, backfire when the markets tank. So its important to have a statistically proven model to calculate a probabilistically desirable level. One way to do this is to look at a stocks Beta as a measure of volatility, and set the stop loss to some multiple of that. I don't have enough time to explain how that would work, but you might want to use that back-testing method to come up with a rule of thumb, which would vary by sector and probably market cap/volume.
When using a trailing stop "buy" order at open, if the stock does not run down, is it correct you are likely to buy at the open price plus your trailing stop amount. For example the stock opened at $10 and your trailing stop buy was .10 cents. If the stock goes up rather than down you could end up paying an additional .10 cents per share, Yes?
Yes that is correct. If the stock goes up immediately after you place the order you will get a worse fill then a limit or market order placed at the $10 price in your example.
On LETFs I use half a percent. I haven't done any back testing on this yet, but anecdotally it does appear to get a lower fill than if I had just done a market order.
Hi Kyle,
I found (and fell in love) with Heikin Ashi candles because of your TQQQ video. Great videos, keep it up!!!
Heiken Ashi candles are great and my "go-to" indicator on many timeframes! Thanks a lot for your comment!
I always use a trailing stop loss % of 15 to 20% when I'm up over 300%, which provides lots of room for volatility ... because, at that point, I don't care if I give up 17% when I know profits are already locked in to at least 283%. Thank you for well thought out articulate analysis.
I use trailing stops (as percentages) when I want to sell (take profit) on a winning position. So far I am not an options trader and hold the underlying stock.Today, I was trying to place an OCO buy order as my regular limit order did not fill. So clarifying this really helped me! Thank so much for putting this out here
Good job explaining your strategery! I was searching BUYING trailing stop orders and there isn't a lot of info to be found. Thus your title caught my search. I had a good chuckle as it is purely coincidental that I currently trade only in 3X leveraged ETF's (SOX's and LAB's). In any event, your back testing on selling with a trailing stop loss is interesting as that has been my experience as well, getting stopped out before I would have liked. Good stuff!
I was experimenting with trailing stops, which like you said, backfire when the markets tank. So its important to have a statistically proven model to calculate a probabilistically desirable level. One way to do this is to look at a stocks Beta as a measure of volatility, and set the stop loss to some multiple of that. I don't have enough time to explain how that would work, but you might want to use that back-testing method to come up with a rule of thumb, which would vary by sector and probably market cap/volume.
Thanks for posting this. It confirmed what I thought about stop loss limits on buy orders. Really helpful.
When using a trailing stop "buy" order at open, if the stock does not run down, is it correct you are likely to buy at the open price plus your trailing stop amount. For example the stock opened at $10 and your trailing stop buy was .10 cents. If the stock goes up rather than down you could end up paying an additional .10 cents per share, Yes?
Yes that is correct. If the stock goes up immediately after you place the order you will get a worse fill then a limit or market order placed at the $10 price in your example.
Kyle - on your buy orders what percent do you set the trailing stop for the bounce back? Thanks
On LETFs I use half a percent. I haven't done any back testing on this yet, but anecdotally it does appear to get a lower fill than if I had just done a market order.