Discussing the article: "Trailing stop in trading"
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Check out the new article: Trailing stop in trading.
In this article, we will look at the use of a trailing stop in trading. We will assess how useful and effective it is, and how it can be used. The efficiency of a trailing stop largely depends on price volatility and the selection of the stop loss level. A variety of approaches can be used to set a stop loss.
Let's check how a simple trailing stop works with and without take profit. At the same time, we will introduce an additional condition - setting and modifying the take profit becomes possible only after the trailing stop moves the stop loss to the breakeven area.
I will use EURUSD H1. Test period - from January 1 to December 31, 2023. Trailing stop timeframe M1. The direction and volume of positions are determined randomly. Stop loss and take profit positions are not set.
The balance graph looks as follows.
Some positions were closed forcibly at the end of the test - this is a drawback of the strategy used. But, the graph gives an idea of how a trailing stop might work.
Author: Aleksej Poljakov