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5. One-Bar Trailing Stop: Used when prices have reached your
profit target zone. Or, when you have a break away market and
want to lock in profits. Usually after three to five price bars
moving strongly in your favor.
6. Trend Line Stop: Using a trend line placed under the lows in an
up trend or on top of the high in a down trend. You want to get
out when prices close on the other side of the trend line.
7. Regression Channel Stop: Using a regression channel to set your
stops. Very similar to a regular trend line, but the regression
channel forms a nice channel between the highs and lows of the
trend and usually represents the width of the trend channel.
Stops are placed outside the low of the channel on up trends and
outside the high of the channel in downtrends. Prices should close
outside the channel for the stop to be taken.
Other stops used are generally a form of one of the above stops or a
derivative of them. Setting stops will require judgment by you the
trader. Judgment is based on experience and the type of trader you are.
You will set your stops based on your psychology and comfort level. If
you find you are getting stopped-out too frequently or if you seem to be
getting out of trends too early, then chances are you are trading from a
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