Trailing Stop or Trailing Take Profit

2019년 10월 5일

Case scenario: Short Position based on a moving average crossing

Stop Loss 0.50%
Take Profit 0.50%
Trailing Stop 0.41%
Trailing Take Profit 0.41%

Using a Trailing Take Profit of 0.41% that gets activated at the Take Profit level of 0.50% results in locking in the profit with minimal risk of closing the position too soon.

A Trailing Stop used with the same 0.41% trailing distance results in a high risk of closing a potentially profitable position too soon.

In this example, the position was almost closed at a loss by the 0.41% Trailing Stop.

Both TS and TTP are good tools to close a position. Using a Trailing Stop with a higher trailing distance, as well as a Trailing Take Profit, should improve our odds of getting that profit.