Generally, trailing stop, there are two main ways of doing trading stop. One way is just simply decide how far from the highest point the price goes. Okay. Let’s assume we are taking a long, long trade. Okay? As the price goes, how many points below, is going to be my trailing stop. So as long as the fluctuate is within still there, then the trailing stop will remain. If the price goes pass that highest point again, then this training stop will move up, and this trailing stop will follow.
So this is using the highest point, a certain amount, a certain points below the highest point as the trailing stop.
The other way is to visually look at a chart on a smaller timeframe to see where, when it starts to go higher, okay where are the supports that it’s creating? Then you move your trading stop to just below that support. Then if it goes higher again, and now you see it’s another spot, your move it higher to just below that support again. Because remember, the supports will always be the point that will help to keep the price stable, so that it is ready to go onto the next leg of the climb. Right? Do you understand that?
Okay, so that’s the reason why. If again, you’re trailing stop, if you are just going to be basing it on, okay, I’m just going to put a certain, let’s say it’s five points below the highest point. As long as the price remains within five points of the highest point, I’m not going to take a profit.
Okay. If you ever use that, then again, going to a lower timeframe is not going to be of help to you, right?
Because it’s straight forward, it’s just five points below the highest point. Then I don’t need to see lower timeframe also. So we are trying to get you on to, in a way, not to overwhelm you with too many things. Okay. Because going lower timeframe will overwhelm you with more information, right?
If you are not going to use that information in the first place to decide your stop loss and your profit target, then why go down to the lower time frame? Having a one minute time frame, just know your entry and your trading setups is good enough.
Then you don’t have to go down to a lower timeframe. You will go down to lower timeframe in two seconds timeframe, only if you are going to use that information to decide where your stop loss is, and where your trailing stop or profit target is going to be.
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