What is a Trailing-Take-Profit?

In one sentence - Trailing-Take-Profit is a condition that monitors the trend and sets to close the position above a specific profit and below a defined loss. In other words, by setting up a TTP, one can ensure that the profits reached during the rising of the asset are locked, before the price goes down, deleting the profits.

It may sound familiar from the Trailing Stop Loss (TSL), for a good reason. The difference between the two is that TTP is monitoring for the Trailing-Stop only after a certain profit, while a simple TSL does so from the highest point of the P/L. In other words, TTP is a TSL with a locked profit.

How to set a Trailing-Take-Profit

  1. On your strategy's exit step, add a condition:
    "...at trailing-take-profit"


    It can be used as a standalone condition, or in combination with other exit conditions:

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  2. On adding the TTP, define the following values:

    1. Profit:

      The nominal($) or percentile(%) profit from which the Trailing-Stop will get into action

    2. Trailing Stop:
      The nominal($) or percentile(%) loss you are willing to incur after the defined Profit. Reaching the will be closed when reaching this value (after the price has crossed above the profit limit).

For example

Here is a strategy with the following exit step:
"Close position at trailing take profit (profit:5%, TrailingStop:2%)"

This exit strategy will trigger only when these two conditions are met:

First, the 5% profit will be achieved. Then, the strategy will start monitoring for a 2% Trailing-Stop. The strategy will not look for the Trailing-Stop until the 5% profit has been reached.

Watch this tutorial video to see it in action

Understanding the monitor widgets

Once the strategy is running, you will see the widgets monitoring for the TTP on the strategy page.

The left widget represents the Profit value. Continuing with our example strategy, here it shows 5%. When the strategy reaches a 5% profit, this part of the condition will be triggered and the strategy will start monitoring for the Trailing-Stop. The defined profit value is circled in red in the below image.

The right widget represents the Trailing-Stop value. We defined a 2% Trailing -Stop. The trailing stop can trigger only after the defined profit has reached.

If both values are the same (5%,5% for example), you can see what value the widget represents at the description at the bottom of the widget.

Numerical Emphasize

In the below example we will continue using the Trailing Take Profit (5%, 2%).

The two right columns will indicate in which scenario the conditions are met. Please note both conditions should be met in order for the order to execute.

Price in $

Price change % from P/L

Price change % from the last price

TTP Action

Profit

Trailing Stop

Entry Price at T (time)

100

0

0

Will wait for the 5% profit to be reached

X

X

T + 1

92

-8%

-8%

The order will not trigger, even though the loss > 2%, because the 5% profit hasn't been reached yet

X

V

T + 2

100

0

+8.69%

The order will not trigger, even though the price rise > 5, since the profit is still 0 (<5).

X

X

T + 3

106

+6%

+6%

The order will now start to look for the 2% trailing stop, securing the 5% profit

V

X

T + 4

109

+9%

+2.83%

The profit continues to accumulate

V

X

T+ 5

107

-2.22%

-1.84%

The price has dropped by 2.22% from the P/L after the 5% profit was secured, therefore TTP will trigger and the position will be closed

V

V

Per this example, we have made a 6.78% profit, instead of the expected 5%. Another thing is that we have managed to take the profit even though the price dropped right after the entry and before another downtrend took action.

This content is intended for informational and educational purposes only and should not be considered investment advice or an investment recommendation. Read more here.

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