A trailing stop is a stop-loss that automatically follows price as a trade moves in your favour, locking in gains while still capping losses. If price reverses by your set distance, the trade closes. It removes the need to move your stop manually as the trade runs.
Forex Term
Trailing Stop
A stop-loss that follows price to lock in gains.
Example
A 20-pip trailing stop on a rising trade keeps the exit 20 pips behind the highest price reached.
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Trading Forex and CFDs involves a significant risk of loss.
Risk
Forex and CFD trading involves significant risk of loss and is not suitable for all investors. Leverage can work against you. This content is educational and not financial advice — always do your own research.