Using Trailing Stops in a Trading System
Chuck LeBeau discusses the use of exit strategies in designing a trading system. In this installment, he discusses the use of the "Channel Exit". This method takes a popular entry strategy and applies it to exiting the market with a trailing stop.
Exiting the market with a small profit only to watch a huge trend continue to move in our trade direction for days or months after our untimely exit can be very frustrating. Therefore, we recommend using different exit strategies based on the underlying market conditions.