Abbreviation: ProfitLockPnts
Category: Trading Strategy: Protective Stops
Input Parameters:

 
Calculation:

For a long position,

If Current Price >= Entry Price + Point Gain Before Activation then 

= Entry Price + Profit Points 

For a short position,

If Current Price <= Entry Price – Point Gain Before Activation then 

= Entry Price – Profit Points 

 
Discussion:

This indicator is useful for creating a trading strategy trailing stop that activates to save a profitable position from becoming unprofitable. However, note that no stop price is activated until the point gain before activation is met, so , so to protect a position from losses this indicator is best used with other protective stops that activate immediately after an entry is made.

Example:

If your entry price is 100 and your Point Gain Before Activation is 10 and Profit Points is 5:

for a long position, no stop price is initially placed. If the price drops immediately, this indicator will do nothing. However, once the price rises above 110, then a stop is placed at 105. Once the stop is placed at 105 it will never change. The stop order will be activated once the price drops down to the value of the trailing stop at 105, at which point you will exit your long position.

for a short position, no stop price is initially placed. If the price rises immediately, this indicator will do nothing. However, once the price drops below 90, then a stop is placed at 95. Once the stop is placed at 105 it will never change. The stop order will be activated once the price rises to the value of the trailing stop at 95, at which point you will exit your short position.