Track 'n Trade LIVE Stocks & Options

Video Transcript

In this video, we're going to follow up on the previous video on programming the Q4 button for a trailing stop. The first thing we need to do is modify the existing settings. So, we're going to right-click on the Q4 button, we're going to slide down to edit Apple, and we're going to bring up the control panel.

In this video, we're going to be working on an exit strategy. So, the exit strategy is for the attached stop that we currently have sitting at $0.50 behind the market. Now, we're going to give it some instructions and tell it what to do once the market starts to move in our favor.

The first thing we can do is we can come in and tell it to be a jump stop. It just reads it as if it's a prompt, and it comes in and says, “If Market moves,” and we can say in here, “If it moves 10 cents, move my stop to break even” plus or minus however many pennies we want. So, we can say in here, we're going to say minus 5 cents ($0.05).What that's going to do is if the market moves up, we're going to drop the stop at $0.50 behind the market. The jump stop is going to say if the market moves 10 cents, then we're going to move our stop up by 5 cents. Okay, so it's minus $0.05 behind the market. That's why we say minus $0.05. If we wanted it to move into a positive position, we'd leave off the minus, and we would just say $0.05. So that would say if the market moves up 10 cents, we're going to move into profitability up 5 cents.

But the nice thing to do is just say let’s advance it a little bit, not too far. We could even say break even; we could just say $0. and it would jump to break even. But in this case, we're going to say minus, and we're going to say $0.05. So, we're going to move it up 5 cents closer to the market.

Then we can come in here and say we're going to trail. As you can see, we can trail it back on any number of different methods once again, but this time we're going to select dollars behind, and we're just going to select $0.05. So, we're just going to continue to trail 5 cents behind the market.

If we want to, we can come down here and then we can say trail until break even. So, then the stop will just trail once the market moves 10 cents in our favor. It will jump to 5 cents behind the market. Then it will trail 5 cents behind the market up until break even.

So, this is a nice way of programming your stop order to do lots of different things. If you don't want it to be a jump stop, you don't have to have a jump stop. You can just come in here and say, “I just want to trail.” Since we're $0.50 behind the market, we can just say I want to trail $0.50 behind the market until break even.

This way, when the market starts to rally, it will continue to trail up behind the market by 50 cents, only risking 50 cents of the current price until it gets to break even. Then it'll stop trailing. If you wanted to continue to trail without stopping at break even, just leave that filter off, and you can begin to trail all the way up until the market intercepts $0.50 behind the market.

But for our example, let's go ahead and leave it trail until break even. Now, at this point, we need to come in and fill in our name and give it all the information that we've programmed into the control panel.

So, we're going to come in; we're going to say this is for Apple. The reason I have Apple in here is that Apple is trading currently at $194.99 per share. If you were trading a $20 per share stock, you might have different numbers in here. $0.50 and $0.50 might not be the proper setting. So, I'm setting this one just for Apple, which is right around $200 per share.

We're going to come in here, and we're going to say okay; this is Apple, and we are going to put a stop. I'm going to just abbreviate these at $0.50, and I'm then going to say we're going to put our limit at $0.50, and then we're going to say this one here is going to trail $0.05, and it's going to trail until break even.

Okay, so that's my title, which will show up down here in the drop-down menu for me. I've got this set to make this my default, so you'll notice when we hit okay, it goes in, and that's the one that's listed. So if we drop down, we can see we've got the other one that's there by default, and then we've got our choice, the one we just programmed in here.

To place our order, all we have to do is drop this on the screen. We're going to drop this onto the blue light system. Now, the blue light system is currently trading below the market, so this would be for a short position. It's going to intercept for a short position off of those blue lights.

So, if we wanted to go long, we would have to wait for the blue lights to be above the market; then we could drop it onto the blue lights which are above the market for a long position. But since the blue lights are currently below the market and we set up our system to trail on the blue lights, we're going to drop for a short position.

So, all we do is we click the Q4 button, we drop it just behind the blue lights, and you'll notice it'll jump to the blue lights and begin trailing for entry to a short position. It automatically sets the trailing stop. Again, this is not activated until the primary order is filled. Once it's filled, the two orders, the limit order and the stop order, will become activated, and then the stop order will begin trailing 50 cents behind the market until break even.