How To Protect Profits With Trailing Stops
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You can protect your trading profits by setting trailing stops that automatically adjust with price movements. Set your stop distance based on the asset’s volatility – use tighter stops (3-5%) for stable assets and wider stops (8-15%) for volatile ones. Trail your stops below key support levels or moving averages, and adjust them based on market conditions.
For day trading, stick to 0.5-2% stops; for longer-term positions, use 10-25% to allow for more drawdown without removing the basis for the trade. Understanding proper stop placement will maximize your profit potential.
This post originally appeared at NetPicks.
Category: Options Trading Strategy
