In the world of trading, having effective strategies can make a significant difference in your success. One such strategy is the trailing stop loss, which can help you secure profits while limiting losses. In this blog, we’re diving deep into how to generate alerts for a trailing stop loss using TradingView and how it integrates with Tradovate. Let’s break it down step by step.
Understanding Trailing Stop Loss
Before we get into the technicalities, let’s clarify what a trailing stop loss is. A trailing stop loss is a type of order that moves with the market price. It allows you to set a stop loss at a fixed percentage or dollar amount below the market price. As the market price rises, the stop loss price rises as well, helping to lock in profits while still allowing for some flexibility in price movements.
Setting Up Your Strategy
To start, we need to set up our strategy in Tradovate. This is crucial because the trailing stop loss works best when your strategy doesn’t have multiple take profits. Here’s how to set it up:
- Select Your Strategy: Begin by selecting the strategy you want to use. For this example, we will select a specific strategy that works well with trailing stop loss.
- Configure Take Profit and Stop Loss: You will see options for take profit and stop loss types. Set these based on your trading preferences. For instance, if you place a dollar amount of $5 and your entry price is $100, your take profit would be $105.
- Define Your Lot Size: Understanding your lot size is essential. For instance, if your lot size is 20, your maximum loss would be $100 based on the earlier example.
Using Dollar Stop Loss
Let’s move on to using a dollar stop loss. Here’s how to do it:
- Fill in the Stop Loss Amount: For this example, let’s set our dollar stop loss to $100.
- Set Take Profit: Similarly, set your take profit at $100 as well.
- Enable Trail Stop Loss: Make sure to select ‘yes’ for the trail stop loss option.
- Enter Trail Value: Let’s say we want to set the trail value to $2. This means the stop loss will always be $2 below the current running price.
Understanding Trail Trigger Value
Next, let’s discuss the trail trigger value. This value is crucial as it determines when your trailing stop will activate:
- Set Entry Price: For example, if your entry price is $100 and the price moves to $101, that’s when the trailing stop gets activated.
- Frequency of Activation: You can set how often the trailing stop will activate. For instance, if your trail stop loss value is $2 and the price moves to $101.25, that’s when the trail will get triggered.
Generating Alerts
After setting everything up, it’s time to generate an alert:
- Select Generator Alert: Choose your Tradovate account ID and generate the alert code.
- Copy Alert Code: Once the alert code is generated, copy it.
- Paste into TradingView: Go to TradingView and paste the alert code. This will allow TradingView to trigger the alert and place your order.
Monitoring Your Trade
Once you’ve set up the alert, it’s crucial to monitor your trade. For instance, let’s look at an example:
Your entry was at 61325, and your initial stop loss was set at 60325, which is $100 less than your entry price. As the price moves, your stop loss will adjust accordingly. If the price crosses 61333.5, your stop loss might change to 61315. This adjustment is based on the trailing stop loss value you’ve set.
To illustrate:
- Entry Price: 61325
- Initial Stop Loss: 60325
- Adjusted Stop Loss: 61315 when the price reaches 61333.5
Conclusion
Setting up a trailing stop loss with TradingView and Tradovate can significantly improve your trading strategy. By following these steps, you can automate your trades and ensure that you secure profits while managing risks effectively. Always remember to monitor your trades and adjust your settings as needed to align with market conditions.
For more detailed insights, check out the complete explanation of the auto trail order and how to integrate it with your trading strategies on Tradovate’s help page.
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PickMyTrade
PickMyTrade specializes in automating trading bots, enabling seamless strategy execution for futures from platforms like TradingView, across well-known brokers such as Tradovate. PickMyTrade
PickMyTrade
PickMyTrade specializes in automating trading bots, enabling seamless strategy execution for futures from platforms like TradingView, across well-known brokers such as Tradovate. PickMyTrade
