What Is a Trailing Stop?
A trailing stop is a modification of a typical stop order that can be set at a defined percentage or dollar amount away from a coin current market price. For a long position, an investor places a trailing stop loss below the current market price. For a short position, an investor places the trailing stop above the current market price.
A trailing stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the investorâs favor. The order closes the trade if the price changes direction by a specified percentage or dollar amount.
A trailing stop is typically placed at the same time the initial trade is placed, although it may also be placed after the trade.
âïž Trailing Stoploss prevents big loss in trades.
