To find out if trailing stop-losses is adding value to your trading
performance, you need to keep detailed trading records that
A-PDF
include Page
your Crop
trade DEMO: Purchase
management fromand
decisions www.A-PDF.com
rationale. to remove
If you are game for trailing stop-losses, you may employ the
following techniques to do so.
2.2.1 - Price Action Setups
Since we place our initial stop-loss based on a price action
setup, there is no reason why we should not adjust them
2. Stop-loss order almost hit
3. Bearish
Pressure Zone
4. Trailed
stop-loss here
1. Bearish Congestion
Break-out Failure;
shorted here
D
1
1. Closing above bullish
wide range bars
C
1
B
A 1 3. When price closes
D
1 above these bars, the
1
stop-loss can be
C adjusted higher again
B 1
1
2. And their corresponding
trailing stop-loss level
A
1
4. Sold here with
3. Measured a limit order
move target
based on
this thrust
2. Bought here
1. Long Congestion
Break-out Failure
2. Starting point of
last bull trend line 1. Shorted here
Tested low
Valid low
3. Bullish Anti-climax was the
second test of the valid low
1. Bear trend line drawn
with this valid high
2. Bearish Deceleration setup bar
with resistance from Congestion
Zone, trend line, and last basic pivot
3. Congestion Zone projected 4. New Congestion Zones were a
from many sessions ago. clear signal to cover our shorts.
3. Two-bar thrust
projection
2. Last
extreme high
4. Another bullish
Pressure Zone
1. Long Pressure Zone setup
Tested pivot high
3. Target projected
from four-bar thrust
2. Target projected
from three-bar thrust
Basic pivot high
1. Bullish
Anti-climax
4. Price reversed right
below the lowest resistance
3. Projected target hit
2. Price pushed through the
Congestion Zone with ease
1. Long Pressure
Zone setup bar
2. There was a 40% chance that 3. R2R projected
the market will reach this target minimum target
before hitting our stop-loss order.
4. Target was below
the R2R projection
1. Bullish setup bar
4. Price trapped between two
trend lines; unclear bias
2. Strong bull thrust
5. Bearish
warning against
momentum
taking short positions
below bull trend
line; bearish turn
1. Gap open below 6. Five bullish
bear trend line bars did not reach
3. First valid low last pivot high.
4. Target projected from bullish thrust
2. Last valid high
1. High of session
3. Most powerful thrust of the session
with consecutive bull trend bars
1. With this valid high
from last session, we 4. But there was no
drew this bear trend line bullish momentum
5. First bar of this
session gapped
up and fell rapidly
2. Bear trend line 3. Pivot lows
broken here formed above
the trend line 6. With this new low, we
adjusted the bear trend line
First bar of
the session
2. Bearish Anti- 3. Setup bar
climax rising into a
Congestion Zone
1. Congestion
Zone
1. Great down thrust for
projecting bearish target Short
setup bar
3. Less
ideal thrust
2. Projected target
with first thrust
4. Second projected target
within Congestion Zone
1. Selling pressure
2. First trend line break
lacked momentum
3. The attempt to continue the bullish trend was
rejected by a bearish outside bar. Note the five-
bar down thrust and the bearish momentum.
2. Intended
short setup bar
3. The market still
1. Seven-bar seemed stuck within this
congestion pattern larger Congestion Zone.
1. Setup bar
4. Breakeven
stop hit
2. Target hit 3. Warnings to exit
2. Shallow bear
trend line from
last session
1. First bar of the session opened
with a gap past the last swing low
3. Congestion around
low of last session
4. Price continued to fall,
confirming the valid swing high
3. Second Congestion
Zone setup (Re-entry)
1. Congestion Zone
2. Short Congestion
Zone setup
3. Re-entry setup
bar (not triggered)
1. Short
setup bar
2. Current session low
3. Merged Congestion Zone
from two sessions ago
4. Another Congestion Zone
5. Low of two sessions ago
2. Bearish Pressure Zone as the
basis for a long Anxiety Zone setup.
3. Instead of falling,
the market formed a
bullish Pressure Zone.
1. A successful long
Trend Bar Failure setup
3. Intended profit
target level
2. Required target level
for positive expectancy
1. Setup bar
1. Bear trend line from previous session
2. First bar of
current session
3. First swing of the day
continued bearish momentum
3. Trend Bar Failure
2. Trend bar
1. Bullish Pressure Zone
