The basic rule of trader - let profit to grow, cut off losses! For example, if we bought a stock for $5 per share and used a 25% stop, we would sell if it fell to $3.75.

Well there can actually be two types: Stop and Stop-by-quote. This means if the price goes higher to $120, your trailing stop loss is at $110 (120–10).

Trailing stop-limit order A regular stop order is triggered by the last sale/transaction price. - Trailing Stop level. Trigger, Stop Loss, Distance. Trailing Stop Loss Zerodha Example. Step = 5: The stop …

Here’s a trailing stop example: You bought ABC stock for $100 and your trailing stop loss is $10. Profit = 60: Continue trailing with the new settings when the order is in profit by 60 pips. 5% Trailing Buy Market for 100 shares: If the price lower than the highest price by 5%, sell 100 shares at the market. As the stock price rises, the trailing stop price does too. A final note, in all the triggers I say "price" . See how it works? Below is a chart example of how a potential trailing stop loss could be used.

Now you might be wondering… Why use a trailing stop loss? You'll find the step by step procedure to create a class for trailing stop on SAR and NRTR indicators. A Practical Example of a Stop-Loss Order Let’s say my limit order from the prior example to buy MSFT was filled, and although I expect the stock to go up, I want to limit my losses in case it drops by, say 5% or more. Loading... Autoplay When autoplay is enabled, a suggested video will automatically play next. Log into your account, and download the ThinkorSwim platform. Learn more. Suppose you purchase 1,000 shares of a security at $50 and set a trailing stop loss 50 cents below the maximum price ($50 at time of purchase). Example of Trailing Stop Loss. A good example of setting up a trailing stop on the InfinityAT DOM. Trailing stop order: A trailing stop order is a type of order that triggers a market order to buy or sell a security once the market price reaches a specified percentage or dollar trailing amount that is below the peak price for sells or above the lowest price for buys. And you’ll exit the trade if the price drops to $110. If the price keeps on falling and hits $49.50, the trailing stop will trigger and an order will be made on your behalf to sell your 1,000 shares at market value.
Let make the concept a bit simpler by considering one example. As the market price rises, the stop price rises by the trail amount, but if the stock price falls, the stop loss price doesn't change, and a market order is submitted when the stop price is hit. When the order is in profit by a certain number of pips, the stop will be moved continously a certain number of pips from the market.

So we multiply our buy price, $5, by 75%, and we get $3.75.) Note: in this post I have used the same pin bar entry signals for examples to make it as easy to explain and understand as possible. What is price? This article considers one of the basic techniques, allowing to follow this rule - moving the protective stop level (Stop loss level) after increasing position profit, i.e. Pips = 12: Trail the stop 12 pips behind the market. (100% minus our stop percentage, 25%, is 75%.