Trailing Stop: Lock In Gains as the Market Moves
Want to ride a winning trade longer, but worried a reversal will wipe out the gains? A trailing stop moves your stop along with the market in your favor, and only exits when the price pulls back a set percentage from its best point. You don't have to guess where the top is — the system follows the rules for you.
How it works
- 1
Starts at the Activation Price
Set an Activation Price; the strategy only kicks in and enters once the price gets there.
- 2
The stop only moves in your favor
For a long, the stop moves up as the price rises and never moves back down; for a short it's the reverse — the stop only moves down.
- 3
Exits on the Callback Rate
Once the price pulls back from its best point by more than your Callback Rate — say 1% — the position is closed automatically, keeping the gains made so far.
- 4
Cools down, then waits to re-enter
After exiting, it rests for the Cooldown after exit, then waits to enter again — so it doesn't buy right back in straight after exiting.
Who it's for
- People who want to let profits run but hate giving them back
- People who don't want to guess the top and prefer to exit by a fixed rule
- People who can't watch the screen all day to move their stop
Key settings
- Direction
- "Long" or "Short (futures only)"; shorting only works with a futures account.
- Activation Price
- The strategy only kicks in once the price reaches this level.
- Callback Rate
- How far (%) the price can pull back from its best point before exiting — 1% means it exits on a 1% reversal.
- Order Size
- How much to trade each time, as a "Fixed Amount" or a "Percentage".
- Cooldown after exit
- How long to rest after an exit before waiting to enter again.
Risks and things to know
Trailing Stop has no Simulation mode — once created, it places real orders. Start with a small amount.
Set the Callback Rate too small and normal swings may shake you out; set it too large and you'll give back more profit before exiting.
Without a cooldown, it starts waiting to enter again right after exiting. Since the stop price is usually below the Activation Price, it may buy right back in.