Trailing-Stop Orders

Modified on Fri, 31 May at 11:25 AM

Trailing-stop orders are a specific type of order that comes into play if the market price moves against your position by a predetermined amount known as the Trail Amount. These orders offer increased flexibility and automation in trading. Here's how they work: When the market price moves in favor of your order, the stop price trails the market at a fixed distance. However, if the market moves against your position, the stop price remains static to safeguard against potential losses. This unique feature allows traders to set a cap on the maximum potential loss (the trail amount) without needing to define a limit on the maximum potential gain. When the market reaches the trigger price, a market order is triggered. For example, let's say a trader is in a long position with a current price of 500. They can initiate trailing-stop orders with a price distance of 20, which creates a sell stop order at 480. Unlike a regular stop order, if the price keeps rising and reaches 550, the trailing stop will adjust to 530 accordingly. However, if the price falls to 530, a market order will be activated. 

For information on further order types, visiDelta Order Types. For video demonstrations, visit  Delta Youtube channel.

Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select at least one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article