Trailing Stops

[missionsman1]

Could somebody explain trailing stops? Are they just used on the big boards or can they be used on otcbb?

[Weirdharold]

In most cases trailing stops can not be used on stock below a certian price... like 5 bucks.... I have heard some say they have been able to use them on pink stocks with less value.

Trailing stops are a stop to help protect your profits. Usually set as a percentage value... as long as the stock increases in value the limit will continually raise itself along with the price increase, but once the stock takes a backward step the limit will be set.... and will no longer simply trail the stock... in other words if you bought a stock at $5.00 and set a trailing stop of 10%... as long as the stock rose in price the stop would follow right along with it and not be activated... say the stock is now at $6.01 then falls back to $6.00 the trailing stock would become $5.40... 10% of $6.00 = .60 .... 6.00 -.60 = 5.40 now the stock falls to 5.40 it is sold and you gain the profit the of .40. but if that stock falls from $6.01 to $6.00 and the stop is set... then turns and begins upward again.... to $7.00 then starts to fall again... your stop limit will still be 5.40 because the trailing limit was set when the stock ticked down from 6.01 to 6.00.

This is the way Mine works anyway.... I got the surprise once of expecting a higher profit from a trailing stop because I didnt understand how that limit was set... once it is set it is set... until you go back and change it....

Hope this helps