Customers ask me: “Why does the trailing stop function turn on so early? After the order is closed by trailing stop, the price starts moving in the same direction again and reaches the level where TakeProfit was.” To answer this question, I decided to conduct an experiment. To do this, I placed the parameter on/off of the trailing stop in the external settings, and look at the results I got.
As an example, I took the Prop Master Expert Advisor:
Read the post: How to test the Prop Master Expert Advisor correctlyIf you look at one particular trade, it may indeed seem that the trailing stop keeps you from making more profit. Such statements I always put in doubt. And to test whether it really will be more profitable, I test everything in the strategy tester.
You can download the detailed reports at the bottom of this post
Which profitability chart do you like best? On the pictures you can see backtests of the Prop Master Expert Advisor with Trailing Stop enabled and disabled. I think the difference is obvious.
Indeed, if you consider one trade, it seems that trailing stop only prevents you from getting more profit. But by considering only one trade, we do not take into account a large part of trades that made a small profit but would have shown a loss if the trailing stop was turned off.
Look at the examples of Prop Master Expert Advisor trades on the chart. Please note: if the price is going well in one direction, the trailing stop does not interfere with the achievement of TakeProfit. And if there is no strong movement, then trailing stop avoids loss.
Therefore, it is always important to check your assumptions with tests, and then you will not guess how it will be better, but will confirm your statement with tests with a large sample of trades.
