ForexBrokersAZ.com

What is a trailing stop order?

A trailing stop order is a variation on a stop order: the stop price moves according to parameters you set instead of staying fixed.

You can use a trailing stop to sell if prices drop more than a set level from the highest price traded, or buy if the price trades above a set level form the lowest traded price.

Let's assume you go long EUR/USD at 1.2000 and set a Trailing Stop 10 pips away. If the price rises to 1.2050, the Stop Price will follow the market by 10 pips and settle at 1.2040. If prices suddenly retrace to 1.2040, the order will execute, netting you a 40 pips profit. However, if prices rebound after that, you will no longer be in a position to profit from rising prices.

Pros and cons of Trailing Stop Orders

  • Lock-in your profits.
  • No upside if prices rebound.
FxPro

Trade 70+ currency pairs, spot indices, energies, metals and shares on fixed spreads with instant ... More

Visit website

Risk warning ?

HotForex

Trade Forex as well as CFDs on cryptocurrencies, shares, indices and metals on floating spreads ... More

Visit website

AvaTrade

Trade 55 currency pairs on fixed spreads, plus CFDs on crypto-currencies, stocks, indices, bonds and... More

Visit website

Risk warning ?

Plus500

Trade online with an interest-free Islamic account. This account has no rollover charges (swap fees... More

Visit website

Risk warning ?