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>My problem is not so much the initial "fail safe" stop, but figuring out how
>to protect profits. I have been looking at both taking profits at targets
>(eg. Fibo targets), and letting profits "run", and trailing stops, and being
>taken out of the trade.
>
>Any opinions on what works best, or what, for instance, would serve as a good
>trailing stop?
In every test I have done trailing stops outperformed targets. The problem
I see with targets is that at some point the market is 1 tic from your
target. You are now risking to your stop for the possiblity of 1 tic.
Also, why limit you potential? If you are very against giving back
profits, tighten your stop.
There is no 'magical' stop. Generally, any of the well known indicators
(moving averages, parabolics etc.) will lock in profits at an increasing
rate. They will all perform basically the same, within their time frame,
over a lifetime of trading. The time frame on which you trade will dictate
the parameters of a trailing stop. I suggest as long as you can stomach.
Beginners go broke by letting their losses run. More experienced traders
go broke by cutting their profits short.
Scot
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