Trailing stop.

It is not always the case that a position with an established stop loss order can be closed at a loss when the trend reverses; if you wish, you can save the profit gained by moving the stop loss to the break-even zone. Moreover, it is not necessary to do this, only in manual mode; a control script called trailing stop has been specially developed for these purposes.

Trailing stop is one of the functions of the trader’s terminal, the launch of which allows you to move a previously established stop loss order following the movement of the price of a currency pair.

The movement occurs only in the direction of the open position, that is, if there is a trend reversal or a Forex rollback against the open position, the trailing stop is triggered and the order is closed in accordance with the established parameters.

An example of setting a trailing stop will allow you to more clearly evaluate the benefits of using this script.

After analyzing Forex volatility , you set the stop loss parameter to 40 points, after making sure that the position has a positive trend, we proceed to setting the trailing stop, its value can be set a little less, for example 30 points.
As a result, as soon as the profit on the open position reaches 30 points, the stop order will move to the opening price. Let's assume that the price has moved another 70 points and now our profit is 100 points, after which there is a sharp price movement against the open position, which triggers the trailing stop. But at the same time, the position is closed with a profit of 70 points; compare the situation with that if a standard stop had been set.

Features of setting trailing stops.

But not everything is so simple with this script; most trading terminals do not allow you to set its parameter to less than 15 points, which precludes its use when trading on short-term timeframes. True, if you trade with a five-digit quote , instead of 15 standard points you will have only 1.5, because the value of a point with a five-digit quote is exactly 10 times less than with a four-digit quote. At least, I noticed this feature in my trader’s terminal.

Trailing stop will also not work if you turn off the trading terminal; this script only works when the terminal is running.

But there is a way out; if you wish, you can install the terminal on a vps (virtual server), which will allow it to operate around the clock, regardless of your computer. Trailing stop is especially popular when using the tactics of pending orders , when you do not have the ability to control the transaction and move the take profit in time in the direction of increasing profitability.

You can find out how to set and modify this order in the material “ How to set a trailing stop ”.