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Conrad,
You're running into the standard problem with trailing stops,
you lose profit when you try to exit the trade in the direction
of a new trend/movement. So in a fast-moving market you are exiting
with everyone else in a panic market. In a slow-moving market the
loss of profits is less, but the possibility of whipsaw is increased.
I've not found a magic solution, but what works for me is to have
a pre calculated profit objective. This gets me out near a peak before
it turns and erodes profit. The disadvantage then is a) sometime
price does not reach my profit objective (too greedy), and
I also miss out on "big moves". However, there is nothing to
stop me getting back into the market in a "big move", so that
downside is not too critical.
You could compromise and exit half your position with a trailing
stop and half with a profit objective?
-Neal.
---
DiNapoli Fibonacci techniques -
http://www.fibtrader.com
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