Here’s one method to use for a trailing stop; Have the market itself tell you were it goes.
The reason brokerage trading platforms have so many options with an endless list of indicators, is that’s what the (retail) public wants.
It has nothing to do (as usual) with what works best.
Wyckoff himself said the market defines the course of action. The “tape” as he called it, was the master for decision making and no other.
Let’s look at what the tape is saying about LABD, the 3X inverse EFT of Biotech (IBB).
The sector has already been traded profitably last week. Shown on the chart below is another entry. Also shown, is what may be the most efficient method for stop placement.
For LABD over the prior weeks, we could have extracted a large part of its move using a trailing stop based on the 4-Hour chart.
LABD itself has defined that 4-Hour looks best at this point in time.
So, that’s what we’ll do (not advice, not a recommendation). The stop will be at the nearest 4-Hour low (currently, 16.27).
At mid-session today, we’ll move it up to the next 4-Hour low and so on until stopped out.