Trailing Stop Loss

There were few queries on what is Trailing Stop Loss? Trailing stop-loss is a stop-loss maintained by a trader which can be changed upwards.

I have plotted a typical Trailing stop-loss on the Reliance Chart .

 Once the stock is bought the stoploss is activated and is changed only upward as the stock goes up. The moment the price of stock crosses stoploss the stock is sold.

So Trailing StopLoss not just protect the trader from making big losses but also locks the profits. One can use various calculations to arrive at the technical support for the stock and change the stoploss just below the support lever.

No comments: