What is a Trailing Stop? http://www.financial-spread-betting.com/course/trailing-stops-limit-order.html And how can we use a trailing stop to manage our risk and optimize profits. It is similar to a stop loss order, in that it becomes a market order to sell (for a long position) if the price goes down to it. The difference is that the trailing stop incorporates a moving price level. When the price of the security rises, the trailing stop level increases, maintaining a percentage or dollar amount below the market price. The level never goes down, so if the price drops back sufficiently, the trade will be automatically closed.
