Many of you wrote in last week confused about what a trailing stop loss is. And how you should use a trailing stop loss. This week, I want to make it clear what a trailing stop loss is. Why you should use it. And how you should calculate it each day.
A trailing stop loss is a way of limiting your losses. A trailing stop loss is a commitment on your part to sell your stock if it goes below a certain price. I'll explain in a bit why you need to keep this commitment to yourself and only give it to your broker when you enter your trade.
But before that, let me go over the example I used last week to explain how you should use a trailing stop loss.
↧