Trailing Stop – A dynamic stop-loss order that moves with the market price. It is attached to an open trade and is recalculated as the trade becomes profitable. For example, if you have a buy order and set a 20-pip trailing stop, the stop-loss level rises 20 pips below the current price as price moves up. Babypips defines a trailing stop as “a type of stop loss order attached to a trade that moves as the price fluctuates”. It locks in gains by tightening the stop as the market moves in your favor.

Back to Robots Glossary Index