Trailing stop
Also known as: trailing stop loss
Trailing stop: A trailing stop is a stop loss that moves with the price as a trade goes in your favour. It keeps a set distance from the price and does not move back.
How a trailing stop works
You set a distance, for example 30 pips. As the price moves in your favour, the stop follows it at that distance; when the price moves against you, the stop stays where it is. Once the stop has moved past the entry price, it can lock in part of the gain — although, like any stop, it can be filled at a worse price after a gap or in a fast market.
Trailing stops on MetaTrader
MetaTrader’s built-in trailing stop runs in the trading terminal, not on the broker’s server, so it stops trailing if the terminal is closed or disconnected. Some brokers and platforms offer server-side trailing stops.
Example
Buy EUR/USD at 1.0850 with a 30-pip trailing stop. If the price rises to 1.0920, the stop moves up to 1.0890 — about 40 pips above entry.
Learn more
- Forex Order Types: Market, Limit, Stop and More Explained
A guide to forex order types — market, buy/sell limit, buy/sell stop, stop-limit, stop loss, take profit, trailing stop and OCO — with examples.
Related terms
- Stop loss
A stop loss is an order that closes a position automatically if the price moves against you to a set level. It is designed to limit the loss on a trade, but it does not guarantee the exit price.
- Take profit
A take profit is an order that closes a position automatically when the price reaches a set profit target.
- Slippage
Slippage is the difference between the price you expect when placing an order and the price at which it is actually filled. It can work against you (negative slippage) or in your favour (positive slippage).