This is a home study course that teaches you how to trade stocks from full-time swing trader Kevin Brown. Just continue trailing your stops... Once again, your trailing stop loss order will go under the previous days low because it is lower. For example, if your $100 per share stock moves up to $200 and the stop order stays at $90, your downside protection will be worthless. Just remember the #1 rule of trading: Keep your losses small and let your winners run. So as the stock hits $125, $150, and $175, the trailing stop raises. This is the red line on the chart above (just under $44.50). Trailing stop orders are held on a separate, internal order file, placed on a "not held" basis, and only monitored between 9:30 a.m. and 4:00 p.m. Eastern. Pips = 12: Trail the stop 12 pips behind the market. Note that at this point your stop loss order is going to be close to your entry price. The protective trailing stop trails along with it. On this day, your stop loss order is triggered and you get stopped out of this swing trade with a nice profit. When the time comes to pay it back, he needs to buy 1 BTC but is reluctant to risk more than $300 on the trade should the market price go up. Since the current days low is lower than previous day, then you need to put your stop loss order under today's low. As you’re probably aware, the cryptocurrency market is one of the most volatile ever so Alan’s concern is more than justified. Since the previous day is lower then your stop loss order needs to go under that day (the day of entry). If you get stopped out now, it will be a good trade! Remember the sentence, "My trailing stop loss order needs to go under the current days low or the previous days low - whichever is lower."? Your stop loss order needs to be placed after the market has closed. If I set a 25% trailing stop, my trailing stop will be 25% less of $100, or $75. Now let’s use the same trade and instead of a stop loss order, you place a trailing stop of $3 dollars. The best way to explain it is with a couple of examples: You own 100 shares of stock ABC now trading at $50. Avoid the temptation to sell because you think that the stock will begin to fall. When you buy a stock, and the price starts to move in your favor, it can be good to have a trailing stop-loss order in place. It helps limit your losses in a falling market but still maximize and protect your profits in a rising market. Download 14 free technical analysis and stock market related eBooks - at no charge! In a trailing stop limit order, you specify a stop price and either a limit price or a limit offset. The trailing stop-loss order adds in a dynamic component to overcome this hurdle. By default the background turns blue for buy orders. Here is an example (on the same chart) of when you would put your stop loss order under the current days low. You do not want to give up huge gains by trailing your stop loss order under a wide range candle! Simple enough. Trailing Stop Sell Order. See my list of the top technical analysis books that I think every trader should own. There is no guesswork involved. With a trailing stop loss order, say you have a $15 stock. Since the previous day is lower then your stop loss order needs to under that day. You might establish a trailing stop loss order of 10% instead of a traditional stop loss order at, say, $13.50. You stop loss order will go under the previous days low (red line) because it is lower. This course teaches you all the common candlestick patterns, shows you the backtesting for each pattern, and then puts it all together into a complete trading system. The green highlighted candle is the current day and the day that you bought this stock. For example, you may want a trailing stop order … Imagine that the green highlighted candle is the current day and the market has closed. You stop loss order will go under the previous days low (red line) because it is lower. But, now this stock is approaching the previous swing point high (that black candle) which will likely be a resistance area. Give this service a test drive. You will see that your stop loss order has moved up. There are no hard and fast rules for every single trade because every trade will be different. Now, your stop loss order has moved up significantly and you have a decent profit in this stock. A trailing stop order is a conditional order that uses a trailing amount, rather than a specifically stated stop price, to determine when to submit a market order.