Episode Details

Podcast:

Should you use Trailing Stops or Fixed Stops?

In this video:
00:22 – Two parts to this week’s podcast
00:41 – Trailing stops and should you use them?
01:13 – How should you use a trailing stop?
02:35 – I don’t use trailing stops
03:45 – Look to move your stop loss or take partial profit
05:46 – Trading for 10-30 minutes a day while on holiday – follow me

Should you use trailing stops as a forex trader? Let’s talk about that and more right now.

Hi, traders. Andrew Mitchem here from The Forex Trading Coach with video and podcast number 327.

Two parts to this week’s podcast

Two parts to the video and podcast today. The first is a question about trailing stops. The second is about a great opportunity I’m going to give you to follow me while I’m away overseas on holiday for three weeks, trading in under 30 minutes a day. More about that shortly. Let’s get back to part one about trailing stops.

Trailing stops and should you use them?

So, the question’s just been received today from a trader. He’s not a client, but he’s a guy that follows me on podcasts called Trevor from the UK, and Trevor asked the question … He said, “Andrew, trailing stops attempting to use as a protective factor to lock in profit in case of reversals; however, they can be taken out in strong retracements. Do you use them?” So that’s a good question. The short answer is, “No, I do not use trailing stops,” but let’s discuss them and their merits or otherwise.

How should you use a trailing stop?

So, a lot of people like the thought of a trailing stop because you think that it’s going to keep following your trade as you keep making profit and locking in more and more of the trade and, in theory, giving you a better return. That’s the theory. There’s a couple of practical issues that you need to be aware of. I’m not sure about other trading platforms, but certainly if you use the MT4, MetaTrader 4 platform, if you use a trailing stop, you actually have to have your computer on. Now, if you have your platform open on a virtual server, that’s fine, but most people probably would just have it on their desktop or their laptop.

If you use a trailing stop and close your chance down, then the trailing stop will not be honoured because it sits on you