| Stop loss orders are great insurance policies that cost | | | | enter your trade. Your stop price moves at a |
| you nothing and can save you a fortune. They are | | | | specified distance behind the market price. Trailing |
| used to sell or buy at a specified price and greatly | | | | stops are raised when a price rises, in a long trade, |
| reduce the risk you take when you buy or sell a | | | | but will remain stationary when it falls. Trailing will only |
| futures contract. Stop loss orders will automatically | | | | occur when the market price moves in favor of the |
| execute when the price specified is hit, and can take | | | | trade to which the order is attached. The trailing stop |
| the emotion out of a buy or sell decision by setting a | | | | order is similar to the stop loss order, but you use it |
| cap on the amount you are willing to lose in a trade | | | | to protect a profit, as opposed to protect against |
| that has gone against you. Stop loss orders don't | | | | losses. Trailing stops are designed to lock in profit |
| guarantee against losses but they drastically reduce | | | | levels and they literally trail along your increasing profit |
| risk by limiting potential losses. | | | | and adjust your stop loss levels accordingly. Often |
| With my system the only stop I use is what I call an | | | | traders will find tailing stops confusing because they |
| emergency stop. My stop loss is automatically made | | | | change them while in an open position. This is not a |
| when I make my initial trade at two points. It is only | | | | wise practice, and should be avoided. It is an |
| for emergencies, like news I wasn't expecting, or | | | | indication that you are not sure of your trade and if |
| anything that will make the market gyrate drastically | | | | one is not sure of a trade it would be wise to exit |
| and I never enter a trade without it. However I | | | | immediately. Trailing stops are ideal because they |
| never expect to use this stop loss to exit my trade. | | | | allow for further profit potential to enter due to |
| I simply will not let the market move against my | | | | momentum, while limiting risk. Trailing stops are an |
| trade entry more than a tick or two. If I find that I | | | | important component to a trader's risk management |
| exited the trade too soon I just reenter the trade | | | | unless they have an exit strategy in their system |
| but if the trade continues to move against me I have | | | | that might serve them better. |
| saved the loss of one or two points per. contract. | | | | The market order is the simplest and quickest way |
| Usually I will only have to exit and reenter a trade | | | | to get your order filled to enter a trade or to use as |
| one time if I have entered a trade to early. This | | | | a stop loss. A market order is a trade executed at |
| means I only lose a small commission per contract | | | | the current market price and they are often used to |
| instead of fifty dollars per point- per contract, when | | | | exit trades to ensure that the order has the best |
| trading the e-mini, and taking what many considera | | | | possible chance of execution. A market order to exit |
| normal loss. | | | | is simply an order used to exit the trade immediately. |
| Trading the futures markets is a challenging but | | | | Be aware that in a fast-changing market sometimes |
| profitable opportunity for educated and experienced | | | | there is a disparity between the price when the |
| traders. However it is not easy, without a great | | | | market order is given and the actual price when it is |
| trading system, and even traders with years of | | | | filled. |
| experience still incur losses. Finding a good trading | | | | Stop loss orders are used to exit trades, and are |
| system and trading in small increments with an | | | | always used to limit the amount of loss, but some |
| emergency stop loss in place will allow those relatively | | | | day traders use them as their only exit, while other |
| new to futures trading to be successful. Once you | | | | traders use them as a backup exit only. If one uses |
| have learned the skills you need to trade with | | | | them as their exit they will risk more than is |
| consistent profits it will not be a problem but until | | | | necessary and might want to find a better system |
| that time it is absolutely critical that you do not take | | | | to trade. Stop loss orders allow you to define your |
| unnecessary losses. If you are new to trading futures | | | | risks before you open a position and in my opinion |
| you should never trade until you have a mentor with | | | | that risk should be minimal. Stop loss orders are one |
| a trading system that gives you consistent profits. | | | | of the easiest ways to increase your chances of |
| A great way to protect profits if you have not | | | | survival when trading commodities and futures and |
| established an exit strategy is the trailing stop. The | | | | they are a powerful risk-management tool. |
| trailing stop loss is an order that is entered once you | | | | |