Trailing Stop Order

A trailing stop order is a dynamic stop-loss order that moves with the market price of an asset. Instead of being fixed at a specific price, it is set at a percentage or dollar amount away from the current market price.

If the asset price rises, the trailing stop moves up with it, but if the price falls, the stop remains at its last position. If the price drops by the specified amount, the order triggers a sell.

This allows traders to lock in profits as a trend continues while still providing protection against a reversal. It is a flexible tool for capturing larger moves in volatile assets.