How to use trailing stop loss

What is a trailing stop loss?

A trailing stop loss is a type of order that traders use to limit their potential losses while maximizing their gains.

If the asset’s price rises, the trailing stop will rise with it, maintaining the set distance. If the asset’s price starts to fall, the stop loss doesn’t move. If the price hits the stop loss level, it triggers a sell order to minimize losses.

Learn more here: What is Trailing Stop Loss.

How to set a trailing stop order?

A trailing stop is more flexible than a regular stop-loss order, as it automatically tracks the asset’s price direction and does not have to be manually reset. Learn more about types of orders on TradeLocker.

Here’s how to set a trailing stop order on TradeLocker.

Step 1: Choose your asset

First, navigate to the Instrument panel and select the asset you want to trade.

Step 2: Select the trailing stop loss on the Order panel

Then, expand the order panel to set the trailing stop order. Click on the Trail button next to the Stop Loss option.

Step 3: Specify the distance from the market price

The trailing stop loss level (T.SL) will appear on the chart.

Now, you can set its distance from the current market price directly on the chart or using the order panel to automatically calculate your price, ticks, dollar amount or percentage of your account.

The key is to set it at a distance that is not too close to avoid getting stopped out by normal market fluctuations, and not too far to prevent large losses or giving up too much profit.

For example, if you are willing to risk 1% of your account, the trailing stop loss level will always follow 1% under the current market price.

Step 4: Confirm your order

Depending on whether you chose a buy or sell order, simply click on the Buy or Sell button to confirm your order.

And remember…

As the market price goes up, the trailing stop loss goes up by the amount you set.

If the market price falls, the stop loss stays in place, securing your profits and limiting your loss.

Learn more about the difference between a trailing stop loss and regular stop loss.