What is a Trailing Stop? | Forex Factory

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What is a Trailing Stop?

  • #1
  • First Post: Mar 18, 2012 1:21pm Mar 18, 2012 1:21pm
Hi guys; this seems kind of dumb to most of you expierenced traders, but what is a trailing stop? In what situations should it be used? I have been trading actively for a few months, and been slumping lately. I wondering if a trailing stop help in the situations when a stop loss can't. I'm not worried about the slump because I have been told by many traders that from time to time you will inevitably lose money. But I just want to know as much as possible.
  • #2
  • Mar 18, 2012 4:25pm Mar 18, 2012 4:25pm
How to Use a Trailing Stop Loss

A trailing stop loss is used by stock and option traders to protect their profits or limit their losses. The trailing stop loss is set at a fixed percentage the trader chooses below the current market price. The advantage of the trailing stop loss over a regular stop loss is that the stop loss price changes in proportion to a rising stock price. If the stock price goes up, the trailing stop loss price also rises. If the stock price goes down, the trailing stop loss price remains the same. As a result, the trader can let his profits run and limit his losses without continually having to place new stop loss orders.

How to Use a Trailing Stop Loss | eHow.com http://www.ehow.com/how_2300100_use-...#ixzz1pVQS48ID
  • #3
  • Mar 18, 2012 7:07pm Mar 18, 2012 7:07pm
Trailing stop is the better of the two, the other being the stop loss option. The trailing stop trails behind the price at a set difference as long as the price rises.
  • #4
  • Mar 19, 2012 12:20pm Mar 19, 2012 12:20pm
Quoting youngin'
Hi guys; this seems kind of dumb to most of you expierenced traders, but what is a trailing stop? In what situations should it be used? I have been trading actively for a few months, and been slumping lately. I wondering if a trailing stop help in the situations when a stop loss can't. I'm not worried about the slump because I have been told by many traders that from time to time you will inevitably lose money. But I just want to know as much as possible.
well everything has been said about trailing stop already. I just wanna talk a bit about the "slump" you go through. You are only trading a couple of months, you should expect to stay in this slump for a couple of years until you find and edge that works (except you are seriously lucky and find one before). Trailing stops per se can increase an edge, but they can't create one.
  • #5
  • Mar 28, 2012 4:17am Mar 28, 2012 4:17am
a trailing stop is a moving stop loss that follows the price (in its intended direction)

if you buy a currency pair at 1.0020 and you set a stop loss at 20 pips below that, 1.0000, then your trade will close when the price hits 1.0000.

if instead you set a trailing stop of 20 pips for the same buy order at 1.0020, then this is what happens. the trailing stop follows the price, if the price goes up 10 pips to 1.0030, then the trailing stop goes up 10 pips to 1.0010. when the price comes back down, the trailing stop doesn't change.

basically a trailing stop helps you lock in some of those pips that went in your direction, but if set too close to the price then it might be triggered to close your order by a sudden price fluctuation.
  • #6
  • Apr 22, 2012 9:37pm Apr 22, 2012 9:37pm
Hi,

Is there any broker that allows you to change your stop loss to a trailing stop when the price reaches a certain level automatically?

In that way, i don't have to constantly monitor the prices.

Thanks,
Jason
  • #7
  • Apr 25, 2012 8:57am Apr 25, 2012 8:57am
Hey guys,


Certainan , this is a very good question. This will be very useful but I do not know a broker that offers this function. Also, I would like to add that most of the brokers turn the trailing into normal stop when the platform is switched off! Take care…
  • #8
  • Apr 26, 2012 2:15am Apr 26, 2012 2:15am
Quoting mr.gardner
Hey guys,


Certainan , this is a very good question. This will be very useful but I do not know a broker that offers this function. Also, I would like to add that most of the brokers turn the trailing into normal stop when the platform is switched off! Take care…
I could be wrong but I thought that Saxo bank may offer this, it doesnt say on the website but might be worth asking
  • #9
  • Apr 27, 2012 3:01am Apr 27, 2012 3:01am
Quoting 4tiger
a trailing stop is a moving stop loss that follows the price (in its intended direction)

if you buy a currency pair at 1.0020 and you set a stop loss at 20 pips below that, 1.0000, then your trade will close when the price hits 1.0000.

if instead you set a trailing stop of 20 pips for the same buy order at 1.0020, then this is what happens. the trailing stop follows the price, if the price goes up 10 pips to 1.0030, then the trailing stop goes up 10 pips to 1.0010. when the price comes back down, the trailing stop doesn't change.

basically...

Thank u for a detailed answer))
  • #10
  • May 16, 2012 12:52pm May 16, 2012 12:52pm
Have a look at this free trailing indicator, may be it can help you more. Good luck, dude!
  • #11
  • May 16, 2012 5:56pm May 16, 2012 5:56pm
Quoting lmnt
Have a look at this free trailing indicator, may be it can help you more. Good luck, dude!
Did check the link in question but for some reason, the screenshots are not loading correctly? No idea why..
  • #12
  • Apr 9, 2015 5:32am Apr 9, 2015 5:32am
Quoting ricko456
{quote} I could be wrong but I thought that Saxo bank may offer this, it doesn't say on the website but might be worth asking
Are you sure that Saxo bank offers this feature? I tried to open an account with SAXO but it appeared that the minimum amount required to open account is 10K
  • #13
  • Apr 20, 2015 8:31am Apr 20, 2015 8:31am
Trailing Stop - a special function in the MetaTrader 4 by means of which the stop loss will move automatically, following the movement of prices in the plus side for you. With it you can quickly "grab" profit.
  • #14
  • Apr 21, 2015 2:37am Apr 21, 2015 2:37am
in simple words when the price goes up, it takes the trailing stop with it, but when the price stops going up, the stop-loss price remains at the level it was dragged to. It helps to control your emotions during the trading process and offers some balance protection .
  • #15
  • May 7, 2015 7:54am May 7, 2015 7:54am
Trailing stops are similar to stop loss with a exception that it moves as the price moves - http://www.independentinvestor.com/s...trailing-stops
Not everybody uses trailing stops as most use normal stop loss. But I find it useful if you want to lock a profit from your trade and don't want to miss a potentially big swing.
  • #16
  • May 7, 2015 10:48am May 7, 2015 10:48am
I am interested in the trailing stop method. I recently read that you can also use it in combination with volatility indicators and the ATR and even make a better trailing stop. Does anyone have experience with that?
  • #17
  • Aug 20, 2020 11:06am Aug 20, 2020 11:06am
A trailing stop is like a stop order. It ensures that the level of stop loss follows the price level. As the price of a product increases, so does the level of stop loss. When the price of a product falls, so does the level of stop loss.
  • #18
  • Last Post: Aug 21, 2020 5:17am Aug 21, 2020 5:17am
it a stop order,but i prefer using trailing stoploss than using take profit, especially if it a trending market it will let you enjoy the full trend of the market.
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