What is trailing stop?

When you set a trailing stop order (at X pips), the platform does nothing until your trade brings profit in the amount of X pips (rate of your trailing stop). Then the platform sets stop loss order X pips far from the current price (in our case it is the break-even point). If the market price goes up, the stop loss level also moves up proportionally. If the market price goes down, the stop loss level remains.
This means that the trailing stop loss follows the current price at a distance of X pips. In this way, a trader limits the possible loss but does not limit the profit. Therefore, a trailing stop is a stop loss control algorithm: "it follows the price to profit". Attention! Trailing stop works only when your trading platform is connected to the server through the Internet.

Back