Rises automatically with price to lock in profit if the market suddenly reverses.
What this stop is
A Trailing Stop (Trailing Stop) is a stop that follows price in the direction of your profit and never moves back. It climbs behind a winning trade, guarding what has built up. If price turns by the set distance, you exit with what you kept. It turns the impossible question “where is the top?” into an automatic rule.
Ways to set it
By a distance based on Realized Volatility (a multiple of the daily range ATR, the most mature method), by a fixed percentage, or behind renewing landmarks (successive lows, a moving average). The core is the same: the distance has to breathe with the asset's nature. Too tight gets you shaken out early and too loose gives the gains back.
Its explicit trade-off
A trailing stop never sells the top. It always pays the final “turning tax”. In exchange it keeps you in the long trends that early profit-taking kills: one 40% trade you rode all the way except its tail beats twenty 5% gains picked while green.
Hypothetical example
A buy at $100 with a trailing stop of 2×ATR (daily range $2.5, so the distance is $5): the stock climbed to $128 over two months while the stop climbed behind it to $123. Then the market turned and you were stopped out automatically with 23%. Nobody sold 128, and you did not give the whole ride back.
Common mistake
Moving it by hand in a moment of fear: widening the distance when price approaches so it won't be hit defeats the tool entirely. The rule is set before the trade and left to work · or not used at all.
Where the trailing stop falls short
In choppy markets: it creeps up with every rise, then an ordinary burst of noise hits it and knocks you out of a correct idea. That is why its distance is measured as a multiple of the usual range of movement, not a fixed number, and widened for more volatile assets.
Where to see it on the platform
The trade journal supports recording and following it, and each ticker's daily range (the basis for setting it) is shown in the terminal statistics.
The position size calculator turns the stop distance into a calculated number of shares.
