Comments on: Trailing Stop Discipline: How to Know When to Sell Your Stocks

By: Sumflow

Sumflow — Tue, 31 May 2011 07:43:48 +0000

Chuck take a look at new concepts in technical trading to see research into trailing stops. It depends on how much back testing you want to do to optimize your stops. It is no big deal to get back in when you are stopped out of you are running them to tight.

By: Sumflow

Sumflow — Tue, 31 May 2011 07:40:16 +0000

Yes the stop should be related to the volatility of the stock?

In commodities markets many use Welles Wilders parabolic stop which does exactly what you say.

By: Glenn Wesley

Glenn Wesley — Tue, 22 Feb 2011 16:30:53 +0000

I’m just getting started with trailing stops. I put all at 10% and am concerned that I may get into some unwanted sales. Can someone buy only 1-2 shares or do they have to buy all shares offered?
Thanks, Glenn

By: Two Tips to Avoid Letting a Bad Stock Sucker-Punch You - Contrarian Stock Market Investing News - Featuring Bargain Stocks

Fri, 09 Oct 2009 15:50:14 +0000

[...] I immediately stopped worrying about my losses. That’s because we religiously adhere to a 25% trailing-stop discipline and a position size of no more than 4% in any one investment. Thus, losses are always [...]

By: Chuck Bilbe

Chuck Bilbe — Sat, 19 Sep 2009 20:54:34 +0000

First, let me say I agree 100% with the idea
of disciplined, automatically-activated stops.
As part of my ongoing “self-education” I have
been experimenting and I think the topic needs
more scientific method. Specifically, wouldn’t
it make sense that the more historically volatile
a stock, the wider its trailing stop should be?
Or, as a stock is approaching its target, that
the stop might need to be narrowed?
I realize that 25% is a good “rule of thumb”, but
it seems to me that there may be times that you
should narrow it, capturing more of your gain, and
other times that you should widen it, so you don’t
stop out prematurely. Alex, can you give this
some thought and talk about it in your future
articles? I bet I’m not the only one who has
stopped-out, only to lose a real opportunity,
or bought a stock that never gained 25% and then
stopped-out for a loss. Is there any way to bring
more science to bear on this important topic?
Thanks again for all you do.
Regards, Chuck

By: Bob Tanner

Bob Tanner — Tue, 08 Sep 2009 19:57:27 +0000

25% is OK for volatile stocks so you don’t get whipsawed but for larger cap stocks that are less volatile I would think a lower % would be more appropriate.

Shouldn’t the stop be related to the volatility of the stock?