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There is one other way and that is to reduce your position when the
volatility excedes your risk allowance.
Neal Hughes wrote:
> 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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