Trailing Stop Definition

A trailing stop is a type of stop-loss order that automatically adjusts as the price moves favorably, helping lock in profit while limiting downside.

What is a Trailing Stop?

Unlike a fixed stop-loss, a trailing stop moves with the price but does not move backward if the price reverses.

It is commonly used to protect gains during a trending move without manually adjusting stop levels.

A trailing stop set 5% below the current price will rise as the price rises, but stay in place if the price falls.

A take-profit order is an instruction to automatically close a position once it reaches a specified profit level.

Technical analysis is a method of evaluating assets by studying historical price and volume data, primarily through charts.

A tick is the minimum upward or downward price movement of a financial instrument.