trailing stoploss for dummies

My friend is full time trader.He trades for living,and is well off.He has knack of finding trades on basis of wolfe wave but he is facing problem regarding stop loss. Recently he identified REL.CAP. for shorting as he was expecting it to touch minimum target of 970 soon(He has been proved right).So he initally shorted at 1115(on 10th July on 2nd bar) with sl above 1150.As scrip started moving down he revised SL to 1126.which was hit very soon and he ended up making loss. On 11 th it opened up in gap and came down sharply to 1099 in 1st hr. then again it moved up till 1129 and then moved down sharply on 4th bar and never looked back.Please give your views for adoption of proper trading style with appropriate trailing SL.

It'd be much better if your friend had posted this instead of you.

I suggest you take a look here.

Here's an open question: isn't it better to switch to a trailing stop-loss only after the trade has moved in the favorable direction? The initial stop-loss is the maximum loss for that trade that you are ready to take -- so why bother till you have any gains?

As you've mentioned, since your friend is well to do and trades for a living, I'll presume he has a system, and a mechanical one at that. If he does, ask him to do a backtest, and maybe he can then go on to optimize this a bit by himself.

This all may be rubbish, but then this is what you get when you've n00bs to advise you.

Hope for the better equipped members to comment.