Trailing stop are important indicators in technical analysis, today i propose a new trailing stop A2RTS based on my last published indicator A2RMA (1), this last indicator directly used an error measurement thus providing a way to create enveloppes, which provide a direct way to create trailing stops based on highest/lowest rules.
The Indicator
If you need a more detailed explanation of this indicator i encourage you to check the A2RMA indicator post i made, parameters does not differ from the supertrend, thus having a length parameter and a factor parameter who is here described as gamma, gamma control how far away are the bands from each others thus spotting longer terms trends when gamma is higher.
On BTCUSD
Something worth mentioning is that the indicator sometimes behave like my MTA trailing stop indicator (2) who is closer to the price when a trend persist thus providing early exit points, however A2RTS behave a bit better.
Price can sometimes break the trailing stop, this can be interpreted as a support/resistance or just as an exit point, the support resistance methodology on trailing stop is not the most recommended.
Sometimes it is recommended to have an higher length rather than an high gamma like in this case for INTEL CORP, below gamma = 3 and length = 20
The microprocessor market like to use higher length's instead of higher gamma's, A2RMA is a non-linear filter, this would explain such behaviour.
Conclusion
Trailing stops might not suffer as much from whipsaw trades than MA crossovers but they still remain inefficient when market is not trending, results of the proposed indicator on major forex pairs are more than disappointing, but i hope this will serve as basis for other trailing stops that might act a little bit better. I conclude this post by thanking everyone who support my work and i encourage you to modify this indicator and share it with the community.
@ZAQDA, Thanks for your support, glad you like it :)
LucF
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Love your approach and the way you're always pushing. Thx for publishing your work.
alexgrover
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@LucF, Thanks for the support, much appreciated :)
AltJams
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Very cool, thanks!!
alexgrover
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@wroclai, Glad you like it, don't hesitate to pm me if you have suggestions :)
ChesTV
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Thanks AlexGrover, any plans to write this for MT4/MT5 which could make the optimisation easier ?
navyreal7
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at the end of the article, did you summarize that trailing stops ended up with extremely bad indicators?
alexgrover
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@navyreal7, I mostly said that there was room for improvement :)
navyreal7
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@alexgrover, I beg your pardon, I am hampered by translation difficulties .. Tell me, does it mean that in the conclusion the words were not voiced that the results of the test of the trailing stop indicator are extremely disappointing? And the second question right there, it turns out that it is impossible to remove stupid unprofitable trades in sideways movement in any way with the help of such serious views with adaptation (Uhl, Kaufman)?
Realy Appreciated ..
Great Job A Usual...