Bitcoin / US Dollar Perpetual Inverse Swap ContractBitMEX
Description
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Case scenario: Short Position based on a moving average crossing
Stop Loss 0.50% Take Profit 0.50% Trailing Stop 0.41% Trailing Take Profit 0.41%
Using a Trailing Take Profit of 0.41% that gets activated at the Take Profit level of 0.50% results in locking in the profit with minimal risk of closing the position too soon.
A Trailing Stop used with the same 0.41% trailing distance results in a high risk of closing a potentially profitable position too soon.
In this example, the position was almost closed at a loss by the 0.41% Trailing Stop.
Both TS and TTP are good tools to close a position. Using a Trailing Stop with a higher trailing distance, as well as a Trailing Take Profit, should improve our odds of getting that profit.