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Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Introduction to Orders and Execution. Market, Stop, and Limit Orders.
Order Duration. Advanced Order Types. What Is a Trailing Stop? Key Takeaways A trailing stop is an order type designed to lock in profits or limit losses as a trade moves favorably. Trailing stops only move if the price moves favorably.
Once it moves to lock in a profit or reduce a loss, it does not move back in the other direction. A trailing stop is a stop order and has the additional option of being a limit order or a market order. One of the most important considerations for a trailing stop order is whether it will be a percentage or fixed-dollar amount and by how much it will trail the price.
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The information on this site is not directed at residents of the United States and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. IG Group Careers. Inbox Community Academy Help. Log in Create live account. Related search: Market Data. Market Data Type of market. Then, the stock will be purchased at the best price available.
You want to buy MEOW, but you think it will fall in value and want to wait to purchase it. These examples are shown for illustrative purposes only. In general, understanding order types can help you manage risk and execution speed. However, you can never eliminate market and investment risks entirely. If the stock falls below its highest price by the trail or more, your sell trailing stop order becomes a sell market order and the stock will be sold at the best price currently available.
You own MEOW. You think MEOW will rise in value, but want to help protect yourself in case it falls in value. Getting Started. Frequently Asked Questions. Cash Management.
Another criticism is that trailing stops don't protect you from major market moves that are greater than your stop placement. The main alternative to a trailing stop-loss order is the trailing stop limit order. It differs only in that once the stop price is reached, the trade is executed at the limit price you have set—or a better price—rather than at the then-available market price.
Most brokers provide a trailing stop-loss order option. Determine how much room you want to give the trade, such as 10 to 20 cents, and double-check your order. Your stop loss should now move automatically as the price moves. Traders can also trail their stop loss manually. They simply change the price of their stop loss as the price moves. Interactive Brokers. Emerald Trading Technologies.
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