 | What is the definition of Trailing Stop Loss?
The trailing stop loss is also known as the trailing stop. It is an automatic tool that adjusts the stop loss to trail behind the market price of an asset by a pre-determined amount when the market moves in the trader’s favour.
|  | TradersLaboratory decodes Trailing Stop Loss
In the early days of online trading, traders were forced to manually adjust their stop loss levels in order to protect any profits made in the market, while following the market to maximize profits. With the advent of the trailing stop tool, a trader can wait for the market to become profitable, then activate the trailing stop tool, setting it to a pre-determined trailing distance. This protects the profits in the trade by staying still when the market moves against the trader, and continuing to trail the market when it moves in the trader’s favour. If the market moves against the trader to get to the trailing stop, the trailing stop now functions as a stop loss to close the trade but this time, in profit. |
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