Trailing Stop Vs Take Profit Target - When should you use what?
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- เผยแพร่เมื่อ 5 พ.ค. 2019
- What is a "trailing stop" vs "take profit?"
In this video, you will learn the difference between a trailing stop and a profit target.
You will learn the pros and cons and why I personally prefer a profit target over a trailing stop.
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Known for being able to teach anyone to trade in 60 minutes or less, Markus Heitkoetter with Rockwell Trading has taught over 360,000 traders worldwide and has appeared on CBS, FOX, NBC, ABC and more. Markus is on a mission to prove how simple trading really is so that you too can travel the world and live the lifestyle you always dreamed about.
My man Markus,
There is always a give and pull effect
If you trail your stops rather than having fixed targets, you are likely to capture 1-2 massive winners every month
However your equity curve will be more volatile and you could have losing streaks and drawdowns in the process making it very emotionally stressful to execute such a system
If you have fixed targets- its more conservative, you will miss out on those big winners, however your equity curve will be a lot smoother, less losses and drawdowns and psychologically easier to execute
You can even take off half your position at a fixed target and let the remaining run
You nailed it. I agree 100%. Thanks for commenting. Really great comment! 😀👍
Perhaps you can do both, you can use a takeprofit to lock in your winnings. Then if the trade continues in the same direction, rather than miss out on the trend, after you take your profit immediately open another trade with another takeprofit. Keeping doing that all the way along the trend. Finally you will get stopped out, but you will only lose the stake of the last trade. Also, you will only ever have 1 open trade, which is better for risk management maybe.
Very helpful Thank You!!
Awesome! Thanks so much! I was deciding between the 2 strategies and this has really clarified a lot.Much appreciated! Very clear presentation.
Great! Glad it helped 😀 See you in the next video?
You have again confirmed my outlook and settings. It helps so much. I can hardly believe that I have found someone who I am in total agreement with. It helps my confidence and decisiveness. Thank you.
Thanks, Nels! Seems that great minds think alike 😀
Thanks much for your perspective on adjusting a trailing stop.
😊 You are welcome! I am glad that this helps!
Like your videos very much, to the point, no BS and for me is important how to hear always how you do it. You are successful and 95 % of us private traders losing money. Thank for your open statements. !!
I am glad that this helps! :)
Great video!
I personally take profits on half of the position, and then place a trailing stop securing profits but giving some margin in case it may absorb small corrections and keep going up. Just sharing good practices :)
Markus, thanks for all your videos and material. Very informative and simple!
Thanks for sharing, Juan. That makes a lot of sense. "See you" in the next video!
This is good way when market is not volatile, that’s what I think according to my experience..
Explained very well
Awesome! Thank you for watching! :)
Thank you Markus
You are welcome!
Personally I prefer not to use trailing stops in most of my trading, as I am a strict believer in risk reward strategy, I would use trailing stops only if the risk reward ratio is more than 1:2, which is rare
100% agreed!
MH: Nice vid. Can you sometime address how to place Take Profit and Stop Losses for OPTIONS. How does that work for Options? % based? Any difference or similarity to Stocks Profit and Loss stops? How does risk management work for Options? This is a topic that is not addressed by many coaches on YT. So this is really needed for those who may not watch options prices constantly after a trade is on. Thanks.
Thanks Markus
You are welcome! :) Did you learn from my video?
My guess is that if you use Risk/Reward = 1:1 you reduce your tail event trades (on the loss and win side), and that is much preferable to measure the edge (or lack therefore). Trailing always seems to end on cutting both sides too early! Scaling out in reducing your reward side, break even on cutting (again) your reward side, these gimmicks don't seem to work well on today markets.
Thank you for watching! :)
I really like the way you teach about investing. I was wondering if you manually move your stop loss up as the stock price rises or do you set up automatically to move with the market and also what would be a desirable spread? Thanks!
In general, we like to "set and forget it"...meaning we keep our target and stop in the market and let the trade work out. But with our PowerX Optimizer we can combine 2 different exit strategies (conservative and optimized). And with THIS particular exit strategy I will cut my stop loss in half if my first profit target has been hit. This way I reduce my risk and let the other half run.
@@rockwelltradingservices Sounds like a great way to maximize profits. Thanks!
You are welcome! :) Thank you for watching.
Does the stop loss have to match the exact amounts of all the sell limit orders ? Or it just gets rounded off, 100%? But is it the same? Neurotic thought maybe but what’s the deal?
Markus I started to following your channel I would like to know if is possible to get the software that you use I hope is not a problem for you.
Hi Rico! You can check out mytradingroutine.com. You can request a demo by clicking the button under the video I posted in the said site. :)
@@rockwelltradingservices Thank you so very much
Very good explanation Sir. I had some confusion regarding this which got cleared. It has been 5 years and do you still do not use trailing stoploss or you have managed to learn a new way of using it.
Thank you for watching! ;)
Thank you!
I went in at 11.53 with CCL and it’s higher than I wanted to get in at.
Can I do a buy trailing stop if it starts to dip so I can try to get a better price?
Would I set a stop limit to sell everything at 11.53 (to break even) and then use a trailing stop to try and buy back in at a lower number or should I just watch how low it dips with my own eyes and execute a market buy during market hours?
HI Tyler, yes, you could apply a trailing stop and hope that it keeps going higher. I personally prefer using a simple stop loss and a profit target. For me, THAT has been more profitable than using a trailing stop.
I put a trailing stop to buy in hopes that the price goes lower. But I set it at 5% and I tried to cancel the order to just do a market buy but Robinhood won’t let me cancel it.
PLEASE stop using Robinhood for trading! Here's why: th-cam.com/video/eDS-_lQMXZg/w-d-xo.html
Nice
Thank you!
Does a trailing stock move up automatically if done good till canceled? Or do I have to do it manually?
It depends on your broker. Most brokers allow a trailing stop, and they usually move it automatically for you. Does this help? 👍
@@rockwelltradingservices yes, thanks for the help! New subscriber here.
Awesome! You're going to love it 👍
Interesting. Thank you. Can you teach someone to trade? If yes what is the cost and term of payment please.
Hi rehotimade. We do teach people how to trade but I would recommend that you check the tools that I use to trade because that already includes training and courses that will help you get started. Here is a video about its www.rockwelltrading.com/video-tour/. When you are ready, you may use this link to purchase it rockwell.infusionsoft.com/app/orderForms/PowerX-Optimizer?promo=cristyspecial this link provides $1000 discount.
When should I exit FANG+ related funds to take profit? Mid Nov.~ early Dec.?
Hi Christina, I personally use indicators to time entries and exits. I did a video on it, and you can watch it here: th-cam.com/video/r6R6RwT9Yms/w-d-xo.html
And if this intrigues you, then check out THIS video that I did:
myTradingRoutine.com
Does this help?
@@rockwelltradingservices Hi Markus, thanks a million for your quick response. I'll check the video and see what I should do next. I also see you have a tweeter account and I just follow you :-) Currently I read others technical chart and advice, then use my instinct... So I'd love to learn the skill you've shared..
Thanks, Sir ^^
You are welcome! Enjoy learning! :)
A disadvantage to video learning verses reading a book - while listening to the video I hear something I consider important, I stop to ponder on the input and by that time the speaker in the video is on to something else that I might have just missed -
I suppose I could pause the video and make notes etc. In any case I am going to have to watch this one again, for the third time -
I’m not complaining here this morning, (4AM) - just babbling -
I hope that you are learning from this. :)
I thought the trail stoploss gets smaller, 😢 I'm confused, shouldn't it move from 90 to 85,?
Hi! You are watching an old video. Please watch Markus's latest livestream here th-cam.com/video/SkbOSR73rxU/w-d-xo.html
Hi
How can I help you?
@@rockwelltradingservices trading mi brother. I'm student
Hi Daniel! If you want to know how I trade just go to mytradingroutine.com
Why vs? Why not use a take profit and a trailing stop together?
Hi Colin, of course, you can do it. I like to keep it simple. I sometimes have 12-15 open positions, and if I would keep trailing stops AND profit targets on all of them, I would get confused. But do whatever works best for you! 😀
Yes, that is correct. I would have to take care of 12-15 trailing stops every day IN ADDITION to finding new positions. Too much work for me, but if you are more comfortable with trailing stops, go for it. I'm just sharing my experience and what works best for me. 😀👍
LOL - Thanks, Colin! Much appreciated. Stay in touch and talk soon!
Thanks you for this video
You are welcome! Thank you for watching! ;)