whipsaw Posted April 6, 2008 Report Share Posted April 6, 2008 Lock in your profits with a Trailing Stop Our new Trailing Stops track your profitable positions automatically – and close your trade should the market move against you. This new type of Stop Order prevents you having to monitor and move your stops constantly. You set the conditions for your Stop to move automatically, should the market move in your favour. Trailing Stops can be used on long or short trades, helping you to secure your gains as the market moves. How does it work? When you open your position you specify two numbers: Stop distance – how far away from the opening level your Stop is placed Step size – the size of the increments by which the Stop can move Say you ‘buy’ our Daily FTSE 100 at 5800 - 5802, choosing a Stop distance of 30 points and a Step size of 10 points. The Stop initially sits 30 points behind your opening price, at 5772. Immediately the FTSE starts to rise. Very soon our closing price has risen to 5812 (10 points above your opening price) and your Stop ‘steps’ up by 10 points to 5782 to re-establish a 30-point distance from the new market level. The rally continues and by lunchtime the blue-chip index is trading at 5865 - 5867. Your Stop has therefore moved automatically five more times, so you are now sitting on a healthy potential profit with your Stop waiting 33 points behind at 5832. A surprise leap in US unemployment figures suddenly sends stocks plummeting and within minutes the index is trading back down at 5810 - 5812. Your Trailing Stop has kicked in and your position is closed 33 points below the recent high – at 5832, still well above your opening price of 5802. With a conventional Stop Order you would still be in the market, looking at a relatively small paper profit. By contrast with a Trailing Stop you are able, in this scenario, to profit from a volatile market – and take a lunch break too… Instruments covered We offer Trailing Stops on currency bets, plus the following Daily Indices: FTSE 100 Wall Street US SPX 500 US Russ2000 Japan 225 US Tech 100 Germany 30 France 40 Hong Kong HS34 Australia 200 Trailing Stops can be added when placing a trade, or attached to open positions at a later stage. Please note they are not 'Guaranteed': like standard Stops they may be subject to 'slippage' in illiquid or fast-moving markets. http://img169.imageshack.us/img169/5822/trailingstopigindexvz7.jpg Link to comment Share on other sites More sharing options...
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