This indicator is a highly effective volatility-based adaptive trailing stop which captures the majority of the position profit while minimizing whipsaws. The input value, "STOPSENS", adjusts the probability for tomorrow’s expected range to stay within the limits projected by the stop algorithm. It is usually best to determine this sensitivity value empirically by experimenting to find the best value which keeps the stop point just out of range of the typical pullbacks in price within the trend. Typically, we find that an input value range between 1.5 to 5 works well, with the smaller value giving a closer stop.

This stop algorithm comes as both an INDICATOR and as a SYSTEM, both called, PRO STOP^TM. The indicator will plot a continuous dotted line on the price chart indicating the ongoing stop level. In addition to the sensitivity input, STOPSENS, the Indicator also has an input, PLOTBOTH. When set to TRUE, the indicator will plot both the buy stop and the sell stop levels continuously. When set to FALSE, the indicator plots only one stop or the other, depending on whether it is long or short. (This does not reflect whether whatever system you are running is long or short, but rather whether the JLAG stops have been hit and reversed your position.)

Available on:

TradeStation

Multicharts