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Protecting Profits with Trailing Stop: Optimizing Gains in Trading

In the trading world, there are various strategies to safeguard profits that have been accrued. However, among the multitude of strategies, the trailing stop is considered one of the most effective. As traders, we often face the question, "I've made a 100-pip profit, should I close the position?" The answer to this question is not straightforward, which is why the trailing stop is a sought-after solution.

A trailing stop, also known as moving the stop loss (SL), is a technique aimed at protecting acquired profits. When a trading position has yielded profit, instead of closing the position outright, we adjust the SL according to price movements. This allows us to retain profit while keeping the position open to capture further profit potential.

Every trader has their own habits in trailing SL adjustments. Some move it every 10 pips, while others use half of the take profit (TP) as a reference point. Some traders even use support and resistance levels or Fibonacci levels to guide SL adjustments. Nevertheless, the main objective remains the same: protecting earned profits.

In addition to trailing SL adjustments, we can also adjust TP according to the strength of the trend. Although it requires extra diligence, this allows us to continue following the trend without being burdened by spreads. This way, we can maximize profit potential without frequently opening and closing positions, which can increase spread costs.

Although trailing stop is an effective strategy, there are some common obstacles. One of them is the lack of diligence in manually executing trailing stops, especially if the trading platform used does not offer automatic features. This requires continuous monitoring and consumes considerable time.

For traders with limited time for trading, manually implementing trailing stops can be a challenge. However, despite requiring extra effort, trailing stop remains one of the most effective strategies in protecting profits and optimizing profit potential in trading. Therefore, patience and diligence are crucial in executing this strategy.


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