It is never necessary to use a trailing stop. That is personal choice.
A stoploss is the price level that when price moves against your trade, the trade will be closed by the broker at that level.
A trailing stop usually moves the stop loss to break-even level when the trade has moved a certain amount of pips. As the price continues in
your favour, the stop loss is moved to trail it.
A trailing stop usually moves the stop loss to break-even level when the trade has moved a certain amount of pips. As the price
continues in your favour, the stop loss is moved to trail it.
I think Keith is partially right in that it is never necessary to use a trailing stop, here's why...
I'm using an EA (more info here) which has two
options where I can insert a value to optimize profits especially for when the market is trading in between a range on the daily chart and you
want to trade the recommended 1H chart for the EA to work best.
The two options are:
The breakeven option moves the stop loss to break-even level (which is set manually) when the trade has moved a certain amount of pips
(also set manually), and that is all it does.
The Trailing Stop option is almost always enabled when I use the EA just to have an extra option to maximize my profits for when the market
continues in my favorite at first and I'm in the money quite a bit and then it suddenly moves against my trade, only then the trailing stop has
triggered and has put the stop loss to follow along (in steps set manually, usually I start with a 25 point step), so with every 25 points that
the market moves in my favor it will move the stop loss to go along automatically which maximizes my profit when the market eventually decides
to go against my favor.
Normally you'll need to keep your eye on the chart and set your trailing stop later on if at all, if you're using the EA I'm using you've set this before
you open a new order so you can forget the whole trailing stop thing whatsoever because it will do it for you fully automatic when the time is
I hope this was helpful to you and best regards,
No, Keith is entirely right. There are
If you use № 2, then there is no need to trail, to break even or otherwise.