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This question was previously asked by me here: Understanding a Trailing Limit if Touched Order . Frankly I am still having a hard time getting it so I thought I'd ask a real world example.

I bought 49 shares of SPY this morning at 205.09 and I'm pretty convinced that it's going to 205.55 and I'd like to set a trailing limit to lock in my profits should it go past 205.55. I know if it goes to 205.65 and I have a trailing amount of .10, that it will then execute when it retraces downward from 205.65 to 205.55. So I only want the trailing limit order to kick in if it reaches 205.65 .

I don't want to set it .10 down from what I paid for it though. If it doesn't execute by day's end then I'll just execute a sell order at the close for whatever the best price is I can get.

I think my trailing limit screen might do this. You can see it here: http://i.imgur.com/kjrg5Fy.png . I just need some guidance on what to fill in.

In fact, I might even be headed down the wrong path by using this type of order and that's where the wisdom of the masses comes in (and I have learned so much from lurking all this time and I thank you all).

My first order...

So in a nutshell, I execute one order in the morning of say 49 shares at "X" price. I'm convinced that it's going to reach "Y" price.

My second order

I would like to lock in profit between "X" and "Y", so I set a trailing stop to kick in at "Y"+.10 with a trailing of .10 . So if stock reaches "Y" price plus .10 cents and drops, I can sell at "Y". If it keeps going up up and up and then retraces .10, I'd like to sell.

If it never reaches "Y" price plus .10, I'd like to sell it at the end of the day ("Z" price). I then take the hit from "Z" - "X" .

I appreciate any advice on this. It's a pretty straight forward strategy I think and I quite possibly am over-complicating it (and if so, I won't mind if you call me on it).

JW

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    I dont think you need a LIT order. A trailing limit sell order at 205.65, with .10 trail, is what you want I believe. You could always load up an IB demo and try for yourself, just to be sure – von Mises Nov 20 '14 at 2:32
  • Is what you're trying to do essentially to sell if the stock first hits at least 205.65 (or higher), and then drops to 205.55 (or lower) and sell at whatever price you can once that happens? Or does it have to be sold at 205.55 or higher (meaning if it runs to 205.65, then drops past 205.55 quickly and goes lower, you might not get a chance to sell). – Jaydles Nov 21 '14 at 21:05
  • @von Mises's suggestion won't work because a trail limit order is only useful to lock in a profit once the market price is above the purchase price (205.09). I've asked the same question on Quant. – Gascoyne Sep 4 '15 at 11:08

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