Trailing Stop
Also called: trailing SL
A stop-loss that automatically follows price in your favour, locking in profit as the trade moves.
Definition
A trailing stop is a stop-loss order with a dynamic level. It moves with price in your favour but never moves against you. You define the trail distance (in pips, ticks, or %); the broker handles the rest.
Trailing stops are popular for trend-following strategies because they let winners run while protecting accumulated profit. They’re typically managed client-side by the platform, not server-side — meaning your computer or VPS must stay online for them to update.
Example
You buy EUR/USD at 1.0850 with a 30-pip trailing stop. Price rises to 1.0900 → stop moves to 1.0870. Price hits 1.0920 → stop moves to 1.0890. Price reverses to 1.0890 → you're out at +40 pips.
Formula
New stop = max(old stop, current price − trail distance) (for long positions)
Why it matters
In MetaTrader, trailing stops are client-side: if your terminal disconnects, the stop stops updating. Use a VPS or server-side trailing if available.
FAQs
Does a trailing stop guarantee profit?
Only if it's already in profit territory. If you set a 30-pip trail and the trade moves 20 pips and reverses, you'll lose 10 pips.