What is a Trailing Stop and how do I place it?
A trailing stop is a stop that adjusts to a more favorable rate as the trade moves in a trader's favor. The amount the stop moves depends on the type of trailing stop and what the trader sets it at.
There are two types of trailing stops:
- A dynamic trailing stop is the most common trailing stop. This will adjust our stop every 0.1 pip that the trade moves in our favor. For example, let’s say we set our dynamic stop initially at -10 pips and then the trade moves in our favor 1 pip. Our stop would move 1 pip from -10 pips to -9 pips. The further the trade moves in your favor, the further our stop will move, pip for pip (actually, to be more exact, it will move in 0.1 pip increments).
- A fixed trailing stop is very similar to dynamic, except it will only trail in fixed increments of pips. When selected, there is a 2nd field you can change. This is the fixed amount of pips the stop will move. So rather than having a stop trail every 0.1 pips like the dynamic trialing stop, you can have it trail every 10 pips, 20 pips, 50 pips, etc.
To place a Trailing Stop in Trading Station, please follow the steps below:
- From the Open Positions tab right click the desired position and select Stop/Limit.
- Check the Stop Box.
- Select a Trailing type of either Dynamic or Fixed.
- Click OK