Trailing stop

After buying a stock at RM 5, you immediately place a sell order at RM 4 – 20% below the purchase price.

Say, if the price rises to RM 7, you then raise sell order to RM 5.60 – 20% below the market price of RM 7.

As the price rises further, adjust your sell order accordingly. Hence, your sell order is trailing the prevailing market price.

Once the price falls to your predetermined selling price of RM 5.60, sell.

The strategy maximizes your gains and protects your principal.