How to Set a Trailing Stop Loss

In this video, I’m going to explain how to set a trailing stop loss. I'll also show you the difference between an ATR trailing stop and a percentage based stop. The difference in potential profit will probably surprise you.

Of all the professional exit strategies, the most widely used would have to be the trailing stop loss. This is the best way I know to make triple digit gains. The trailing stop is ideal for letting a profit run, while at the same time, giving you a clear-cut exit point for when a stock turn lower. And in this video, I'll show you how to set your stop like a pro.

00:00 Intro
00:26 What you'll learn about the trailing stop loss?
01:10 Question: What determines a stops width?
02:00 Using a stock's trading range to set your stop
02:35 The pros calculate an ATR to set stops
04:27 How an ATR trailing stop responds to volatility
06:50 Which is better: An ATR stop or a percentage stop?
08:29 Example of a percentage based stop
09:18 Advantages of a percentage trailing stop

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GENERAL ADVICE WARNING

This video is about

[slamfreepoetry]

after this, my arm workout game is next level!

[petertemby]

Hi Jason. the trailing stop is the most important part of trading in my view. I tend to use 25% on stocks not recommended by Motion Trader or on ones recommended but which gapped up too far to be included in the portfolio. I have several times picked up stocks within the limits but which you did not include, possibly because i put my orders in the evening they are posted and my on line broker may be matching my order before other traders have got around to changing their sell orders. The 25% serves me reasonably well and I still can trade without any emotional issues of selling at a loss or a profit. It now barely registers whether I make a loss now, thats just an opportunity to better deploy my capital. I far prefer for you to set the stops, because that is what the back test results are based upon. Best system i have ever used!

[MichaelMidnight]

That was great info thank you is there any way you can demonstrate the various ways to fill in brakets for different scenarios of take profit, trailing stop, oco, etc. There are so many ways long and short both before and after you enter the trade. Id like to be able to follow my position up and down the chart with my stop loss. How do you set this? Can i set my trade to take profit at 50% of my target with tiered trailing stops? Ive seen it in motion but ive never seen anyone fill out the brackets. This would be great to watch. Thanks.

[mgimenez]

Thanks for the video, in trades I already have in place, do i work out the 30 day average from the last high (which was in July) or the from this week being 22/11/2021. Thanks

[jgwilliams]

Trading on the go... 35% trailing stop works for me.

[johnryder]

Is there any platform which provides trailing stoploss based on certain percentage from the days high price?? Please let me know🙏

[Wizards]

I gather that in using and ATR calculated trailing stop that, from time to time you would recalculate and enter a new stop loss as the ATR widens or closes? If so, how often would you be adjusting your calculation?

[allanjfotos]

That's great and easy to understand however I want to see the actual setting on the exchange as to what box you tick and enter the hot numbers.

[NK-neuf]

What a good teacher and a professional presentation!

[d.beaumont]

Thank you Jason, I always appreciate a great quality video!

[justghostjoon]

In case you are still responding, or anyone can, I’ve concluded on doing two trailing stops per stock. Half at 5%, half at 10% for example. I day trade btw only looking to ride few days. So when it dips I save loss on half my holds and if it does bounce back between 5-10 then I can still hold half. Is this ill advised? Or do I have a decent idea on ‘one’ of the ways? Thank you to whoever can chime in.

[fishmut]

Liked and subscribed, Awesome video, thank you.

[radfordwhite]

Which stop loss method do you recommend for trading options?

[xclusifstocks]

thanks for this video Jason, I have just updated my Scanner code to use the approach, that derived SL shall be, the Lower of:

Close - ATR(30) x10
or
Lowest Low (30)
or
Close minus 25%

I feel / it seems logical that if during the same ATR period (30 days above) there is also a Lowest Low that is present which is further outside of the ATR approach then it may get re-tested and you possibly may wish to sit your low at or just below that Lowest Low value ?

In any event, I can see that bringing in ATR is definitely a more relevent approach, and I can always tweak around with the parameters I guess, and spreadsheet review them too.

[hbreik]

High Jason;
Thank you for this WELL presented video on Trailing Stops methods. I find extremely useful to re-listen to it especially at this current uncertain situation of the market. I know MT keeps updating stop losses for each stock in the portfolio and I know that 25% is normally used below the entry signal. Please clarify what method MT is using to update stop losses levels in due course after the entry.
- Does MT use the ATR method after calculating the 30 -days ATR ?
- Does MT have a minimum stop loss level below current stock prices or it varies based upon market conditions ?. Please clarify .

[limerick]

i dont know if you answer questions but... Is there such a thing as setting a price at which a trailing stop gets activated/ triggered . For example: set a 30% trailing stop activation once XYZ ( currently at $40 ) surpasses $50 a share. I am on TD Ameritrade and cant figure it out.

[rhodamilsom]

Hi Jason, I have just found your channel.I have been experimenting with the 30 day ATR trailing stop.I have found that one trade is showing a stop loss of -110% why would this be?

[jakecondemn]

Thank you for the video. Everytime I set a traing stop loss, the candle tail would fall drastically and exit my trade then the price goes right back up. If it wasn't for the massive candle tail I would still be in the trade. Is there a way I can protect myself from that?

[tloyou]

I bought 10 shares and I want to sell 2 shares at 7% 2 shares at 15 % gain 2 shares at 22% gain and the rest 4 shares a Trailing stop at 15 % but I like also to put a trailing stop of my 10 shares at 15% in case the market turn down right away . Can I do that ? Is there a way to do that ? my broker won't let me do that . thank you for help

[clf]

What about just using the current or average implied volatility number for a trailing stop?