This article is taken from the Trader's Journal magazine (December 2009 issue)
The author, Don Dawson, has been trading the futures markets for 20 years. His perseverance through the ups and downs of trading, openness to experience of others, balanced tolerance for risk and patience to wait for his setups are a few of his strengths as a trader.
He obtained his Series 3 license in 1990. Soon afterwards, he registered as a Commodity Trading Advisor with the National Futures Association and formed his company Majestic Futures. He has been a guest speaker on technical analysis at Johns Hopkins University and a guest speaker on the Business of Trading Radio Show in Washington, DC.
He is excited about sharing his passion for trading with others. A quote he likes is “A candle loses nothing by lighting another candle.” He is looking for a balance in life between trading and teaching others what he has learned from 20 years of trading. He acknowledges that the best teacher is a student – always in learning mode and wanting to learn more by teaching.
- Two popular types of trailing stops are manual trailing stops and automatic trailing stops.
Market volatility has begun to pick up and the markets are experienc- ing much larger average daily ranges (average price range from high to low) in most of the futures markets. For example, the E-mini S&P had a 14-point average daily range several weeks ago and now has an average range of 24 points. On average, the E-mini S&P contract trades in a daily range that offers $1,200 from high to low per contract. This creates great opportunities and means that we need a method to lock in profits as the market moves in our favor. Trailing stops are a good way to protection profits in this type of market.
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