What Is a Trailing Stop?
A trailing stop is a type of stop-loss order that automatically adjusts as the price of an asset moves in your favour. It is designed to lock in profits or limit potential losses without requiring constant attention to market movements. Unlike a standard stop-loss, which is placed at a fixed price and does not change, a trailing stop “trails” the current market price by a specified distance (either a fixed dollar amount or a percentage). This means that if the …