Trailing stops

[jkeech]

Hi Marc, how do you recommend I go about incorporating trailing stops into my type 1 or type 2 trades?

Up til now, I've not used trailing stops, I've just used the MOB as a target, but find that I may have missed out on profitabel trades which turned around.

I'd like to know on what basis you calculate a trailing stop for option trdes?

Do you base it on option price, or on stock price triggering a contingent order to exit the option trade?

I use Options Xpress, which have a good variety of trade orders - how would you suggest I configure a trailing stop order to exit an option trade, using the underlying stock price triggering a contingent ordrer?

Marc, your help is always much appreciated ... John.

[MR]

Forgive me John, but I am a little disoriented having just returned to work after being away over two weeks, and I got zapped by lightening a week ago. I am struggling to think straight today.

Pretty sure in the Technical section of the AGET manual, in the seminar video tapes, possibly in the new Web-Ex training, maybe in the AGET User Group at File Sharing they might have some more information on this topic you might want to refer for now.

There are many ways to do trailing stops. What is taught in the tapes and manual is the use of a 6/4 DMA Channeling technique. Another idea is to cross reference to a shorter time frame for a quicker 6/4 crossover entry and tighter trailing stop mechanism. Some recommend using the break of a Regressive Trend Channel line. Some might use an aggressive Ellipse application, trailing the price trend from pivot to pivot and placing a trailing stop below the moving Ellipse? Maybe later I can return to this topic. I will put this topic on my work list to add more details to the AGET User Group in File Sharing.

As for options, I will defer this answer to someone with more knowledge of this subject. We just don't have much information on how to adapt strategies to include options considerations. You may wish to contact a company called 'Optionetics' who are experts in options and who use AGET. Ask them for guidance with trailing stop option strategies. Options need time decay considerations, and some use complex spread strategies which are unique. Things recommended in our writing may not be 100% applicable to options traders. Sorry, wish I could help more.