How can I use Exponential Moving Averages (EMA) to trail your Stop Loss? The exponential moving average provides us with great areas of dynamic support and resistance levels. This information is especially useful for traders that are placing stop loss (SL) orders.
Rather than using static levels for your stop loss, you can trail your SL above/below a relevant EMA. As an aside note, make sure you always use a buffer for your SL to account for the inevitable false breakouts.
Another question. Also, do we need to do a stop loss on our LT stocks? from common sense, we should do this but all my ETFs and key stocks like APPLE and MSFT were sold due to SL.
techserve2020
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thanks for this insight: I have been looking for something like this in this month of September wherein the market tumbled badly. Most of my stocks were sold out at the stop-loss and then their prices went up and I never had an opportunity to buy them back. I am a new entrant in the market, slightly above three months. I failed to learn where my stop loss should be. And also if I place my stocks on trailing stop loss from the Bollinger band, the position sizing becomes very small and the stock trading becomes a kind of no gain or very little. this is true that we may plan an entry close to the EMA and then with a trailing stop loss near the lower BB would make sense. ? Again my biggest failure is the stop-loss invalidated when the stocks tumble pre-market. should we make a stop loss as a day order or a GTC order? The GTC order does not activate in the pre- or post-market. Kindly advise and clear some of my confusion. thanks