Tin,
Funny you bring this up as it was something I was looking at today as well. Here's my take - I'm terrible at trailing manually. I know that just 'eye balling it' doesn't work for me, so some sort of mechanical system is needed.
Here's the options as I see it in no particular order:
* Trailing Stop
* Fixed Profit Target
* Some sort of combo of these two options
I think everything is really a function of those three options. Either you say I am going for +10 and sit there with a limit order or you say I am going to wait and take myself out (manually or rule based).
So for me, obviously a fixed target is easy; however - it really sucks in a big move. If you get a trade that ends up going for +50 and you are out at +10, you can sit there and scratch your head for awhile. Of course the argument is you can re-enter, but let's say that doesn't happen.
And a trail is a touchy thing as you've illustrated here. My belief is that the trail needs to be aggressive or loose. I'm not a big fan of the move the stop to break-even or around there simply b/c it creates a 'risk free' trade. Well, you tell me - how did your 'risk free' trade work out?
Exactly. Point being that if you had an aggressive trail, you would not have caught the +50, but I would guess that you could have got more than +1. And a loose trail could very well catch the +50. Of course, there's plenty of times where that aggressive trail and/or break-even trail will 'save' you from a loss.
I think it comes down to one thing - what are you trying to play or catch - smaller moves during the day repeatedly or a couple trades per day trying to catch the larger move (assuming there is one that day)...
The reason I ask that is I don't think it's easy (or possible) to do both - trying to time the perfect exit each and every time just won't happen with any consistency. You either have to make a conscious choice to go for the larger moves knowing that when it doesn't have the momentum, you'll take a loss or small gain or go for smaller moves knowing that it's more likely to be taken out, but you may be watching monster moves from the sidelines.
And you can alter your method based on volatility as well.