Managing Positions with a Broker-Invisible Virtual Trailing Stop

Summary

The document explains an expert advisor approach for managing stop loss, take profit, and trailing exits locally on a trader’s computer. Because the stop orders are virtual, they are not sent to the broker. The article also says the system ignores broker restrictions on stop placement, such as minimum distance levels, though it does not analyze execution or operational risks associated with local monitoring.

Trailing behavior is set by three parameters: trailing length, minimum profit to activate the stop, and trailing step. The stop begins following price once the position reaches the activation profit, maintains the specified distance, and advances in increments as price moves favorably. A retracement to the virtual stop level closes the position. An example uses parameter values of 5, 2, and 3 points to illustrate the sequence. The text offers a conceptual explanation and suggests visual inspection in a strategy tester, but reports no test results or evidence of improved performance.

Key ideas

• Virtual stops are monitored locally and are not submitted to the broker as stop orders.
• Trailing behavior depends on stop distance, activation profit, and the step between adjustments.
• The virtual stop advances with favorable price movement and closes the position if price retraces to it.
• Local monitoring means the method's operation depends on the trader's computer and the expert advisor running.
• The document explains mechanics but provides no performance evaluation.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.