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Trailing stop

In one line: A stop that follows the price as it moves your way.
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You set the distance, for example 5% or 2 points. If price rises, the stop moves up. If price falls, the stop stays put.

The SECThe US stock market regulator. describes trailing stops as stop ordersAn order that activates when a price level is hit. whose stop price adjusts with the market. Once triggered, it behaves like a normal stop, with the same fill risks.

Related

Sources & studies

  1. Investor.gov (SEC): Trailing stop order
  2. Investor.gov (SEC): Investor Bulletin – stop, stop-limit and trailing stop orders

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Last checked: 2026-11-04 · Educational, not financial advice.

Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.