whipsaw Posted September 12, 2008 Report Posted September 12, 2008 Dear Trader FuturesBetting.com is pleased to announce that trailing stops are available on its spread betting platform. Why do Traders use Trailing Stops?Individuals use trailing stops, quite simply, to lock in profits. When a market moves in a profitable direction a trailing stop provides automated discipline to take profits, should the market price change direction. In addition it may encourage an individual to not take profits too early by allowing a profitable position to run, knowing that if the market were to change direction, the position would be closed out. Example:If you buy a FTSE spread bet at 5560, you may decide you want to place a trailing stop at 5540.If the FTSE price was to rise to 5590 the trailing stop would rise to 5570 (i.e. would rise point for point with the rising market). If at any time the FTSE price falls, then the trailing stop order will stay at the highest price that it has achieved. In this example, if the FTSE retraced back down to the entry level of 5560, the position would have been closed out by the trailing stop order at 5570. Conversely, if the market immediately moves against the position, the trailing stop will be activated as a regular stop, should the market trade down to 5540. Trailing stops can be placed on any of the Index, Currency and Commodity spread bets that are offered by FuturesBetting.com
Recommended Posts