It works best when engaging in true swing-trading (trading for swings, not post-breakout follow-throughs) and also day-trading. For position trading, it can be useful for situations in which one is looking for a confirmation of the decision to exit a winning position, i.e. a second reason. It can also be used by a position trader who will tack on more bars behind which to trail the stop, e.g. a two-bar trailer or three-bar trailer.