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  1. Home
  2. /Glossary
  3. /Trailing Stop
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Trailing Stop

A dynamic stop-loss order that moves with the price when it goes in your favor.

Definition

A dynamic stop-loss order that moves with the price when it goes in your favor. If you set a 5% trailing stop on a long position, the stop follows the price up and triggers a sell if price drops 5% from its highest point. It's a way to ride trends while locking in gains automatically.

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Related Terms

Stop Loss

An order to sell automatically if price drops to a specified level.

Risk Management

Strategies for limiting potential losses in your investments.

Take Profit

An order that automatically sells your position when price reaches a target level to lock in gains.

Accumulation Phase

A period when smart money quietly buys up an asset before a major price move.

Annualized Return

The average yearly return on an investment, calculated to account for compounding.

Arbitrage

Profiting from price differences of the same asset across different markets.

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