Forgot to mention one point. How to trail profits in Breakout trades.
One of the best way that I know is ATR based trailing.
Here is an example https://t.co/BTATx5fyW6
An example of ATR based TSL.
— Professor (@DillikiBiili) April 9, 2021
SL for coming candle is Low of the just completed candle - ATR of previous candle. Chart is self explanatory. https://t.co/D95iv4t5j6 pic.twitter.com/e8BkO2j5rn
More from Professor
As per Normal Distribution 68% of the time movement is with 1% SD Limits.
For 95% pf the times movement is within 2% SD limits.
And its only 0.3% of the times that movement exceeds 3 SD.
Since 95% covers a lot of ground that's why 2SD is considered to be a a safe range for most events.
The farther we move from the average, chances of occurrence go down. This is what Taleb sahab calls Tail risk, because it lies in the tail of the standard distribution curve.
Normal distribution occurs everywhere. See this
The Galton Machine shows order from randomness. Each ball bounces left or right at random, 12 times, but together where they fall can be predicted - the normal distribution. This one made by: https://t.co/oI9wOGq7nG pic.twitter.com/VQtVu66OSE
— Tom Stafford (@tomstafford) April 19, 2018
Bollinger Band, which is a very popular indicator has a setting of 2SD. Because its expected that 95% of the time moves will be confined to 2SD limits.
When we say that price is at upper/lower Bollinger band, we are saying that it has reached 2 SD limits and likely to reverse.
Now coming to current scenario, open Nifty daily chart and apply two bollinger Bands on it.
First with default setting and in second change settings to 3 standard deviation.
Crossing 3 SD boundary means that Nifty is now in very rare territory where it has been only 0.3%
More from Stoploss
This is the reason for retailers stoploss. Check it out \U0001f447 https://t.co/fnHPgzCCVn pic.twitter.com/njvqgM9PI3
— Learn to Trade (@learntotrade365) July 28, 2021
Read and follow this.. he has aptly explained about various methods to trail.
2. TRAILING METHODS-
— Trader knight (@Traderknight007) December 24, 2020
1. SWING POINT METHOD-
In this method we use the swing points or the HH- HL OR LH-LL points for placing sl,
In this method we trail our sl when the stock make a Higher low after our entry and keep Trailing the sl till it hits. pic.twitter.com/CqzCkLdWmC
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Beautifully read: why bookselfies are all over Instagram https://t.co/pBQA3JY0xm
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THEY DO READ THEM, YOU JUDGY, RACOON-PICKED TRASH BIN
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