Trailing stop is an order with a major function of an automatic maintenance of open positions with permanent shifting of stop loss level depending on price movement.
For example you open a bearish position and you start selling the currency of your choice.
If the trend still go downwards then your stop loss would go down also but when it goes on the other direction, your stop loss would remain in its position and conduct its function when the necessary limitation is met.
It allows the trader to maximize his chances of gaining profit and at the same time reduces the risk in losing. Just keep in mind that trailing stop works only in an active trading terminal. In such unfortunate situation that it is switched off then the stop loss would be fixed at its current spot.
No comments:
Post a Comment