This is about all I can think to give you. Hope this helps. It can get confusing, but then so can construction work if you have no skills as a carpenter!
a trading stop or trailing stop ?
oh my god im such a noob lmao. yeah a trailing stop!
it follows your trade " the price " and closes your trade when the price comes back so many pips
eg i buy at 100 with 25 pip trailing stop price shoots up to 200 then starts falling back down
my trade is closed when it falls back 25pips (at 175 )
i make 75 pips -minus the spread.
2 Likes
Ahh okay that made so much more sense. Thank you so much!
No Problem…
Don’t forget you can move your stop up manually as well following your trade up or down.
I a new trader, but still trying to help you with some insights. Trailing stop is your regular stop order but where you allow the stop order to move with the changes in price. For example: you took short position on US/EUR.But suddenly market changes in your favor, so you want to take profit as much as you can until price changes in a positive directions. By trailing stop order you can fix your profit at a level, if price moves negatively.in the future.
There’s the answer, now the question changes to “What would you want a trailing stop for?”
Here are some links on the site that might help:
Definition:
Previous Discussion:
Example of Trailing Stops Used In Actual Trading:
in really simple and oversimplified terms
it’s something that follows the price
the words TRAILING STOP
is an abbreviation for TRAILING STOP LOSS
you first need to understand what a STOP LOSS is
basically it’s your safety blanket that stop you from losing your entire account balance
so let’s say
here is your TAKE PROFIT +20 pips
HERE IS YOUR ENTRY 0 pips
here is your STOP LOSS -2 pips
this means
if the trade goes against you. you will lose 2 pips
that should be pretty clear
Now…
let’s say price goes in your favour is now here
here is your TAKE PROFIT +20 pips
Price is in profit ----------- 15 pips
HERE IS YOUR ENTRY 0 pips
here is your STOP LOSS -2 pips
it might now be a good idea for you to move your stop loss ABOVE YOUR ENTRY LINE
like this
here is your TAKE PROFIT +20 pips
Price is in profit ----------- 15 pips
here is your STOP LOSS +5 pips
HERE IS YOUR ENTRY 0 pips
because now…
if you hit your take profit… YOU WIN
if it hits your stop loss YOU WIN
it is now impossible for you to lose money
and you have 0% Risk of loss
does that make sense ?
this is also called MOVE TO BREAK EVEN
or MOVE TO B.E.
Now there are 2 ways to do trailing stop
MANUAL TRAILING STOP
AUTOMATIC TRAILING STOP
if you do it automatically, you can set the number of pips that it follows the price by
and it will always keep that distance
BUT THERE IS AN EXCEPTION
so let’s say your stop is now 5 pips above the entry and price is 15 pips above the entry and you decide you want to run a 10 Pip TRAILING STOP
ok… and if it keeps going up and up, it will alwyas maintiain it’s distance from the price by 10 pips
but, IF IT TURNS AROUND ON YOU AND THE PRICE COMES BACK BY 7 PIPS
it will then be 3 pips away from your stop loss
so… the Trailing stop does not move backwards when price moves backwards
which brings me to the benefit of MANUAL TRAILING STOP
in short
MOVE IT YOURSELF when you think it should be moved
the benefit of this is
you can make the judgement based on market volatility
Example
a member of this forum , a few days ago, jumped into bitcoin
he thought 20 - 30 pips (i think it was 30 pips) would be a safe trailing stop
little did he understand that the spread on bitcoin can fluctuate so much to be as high as 100 -= 150 pips
he got taken out and lost to the effect of $20,000 i think
so you have to consider the environment you are in
now on a positive note
THE PURPOSE OF A TRAILING STOP as opposed to a stop loss
is YOU ARE LOCKING IN PROFIT AND MAXIMIZING YOUR RETURN
now. since you are maximizing return
lets say this example that i gave has the potential to go up 300 pips,
but before it does, it pulls back by 50 pips and you get stopped out
well, why would you risk that ?
so… i advise Manual Traling stops
but to answer your question
THIS IS WHAT A STOP LOSS IS
AND THIS IS WHAT A TRAILING STOP IS
it’s a STOP LOSS that TRAILS BEHIND the price
its like if you are the price and someone else is following you everwhere you go but keeping their distance
you are the price
they are the the trailing stop loss
does that make sense ?
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Sorry Martin, but I think you’re mistaken.
Trailing stops do not maximise your return. True, they lock in some profit but if you want to maximise your return you need to manually place and move your stops according to what you are trading, liquidity, upcoming news events, and how the market is behaving when you place your stop.
3 Likes
Correct.
And good luck debating it with him. The next response will be 5,000 words long, and you’ll get tired of it before he does. 
2 Likes
@eddieb
i know mate… I realize that
I’M NOT MISTAKEN ok
what you failed to realize was… I was explaining this simplistically to a person WHO DOESN’T UNDERSTAND WHAT A TRAILING STOP IS… ok
here is an example of what i mean.
I’m an I.T. Engineer
now. if you knew nothing about computers , and said “how do i make my computer work"
and i said to you
"you press this button here that says POWER and it makes your computer work”
That would be the explanation for a lamen person
now. a technician may come around to me and say “Sorry martin, you’re mistaken, the power button merely shorts the ground and Green Wire on the 20+4 Pin header to bring the PSU out of standby, it doesn’t actually make the computer work, the CPU and RAM and the MOTHERBOARD along with a tonne of Capacitors and Resistors and voltage regulator and so on, Make the computer work”
Do you understand ?
The question was catered for a person who did not understand what a trailing stop is
and when i said this, i was illustrating the point of
with a stop loss, IT STAYS IN ONE PLACE and obviously (not to go into too much depth, because i know you understand ) the stop loss protects your account from Ruin (Assuming of course you have calculated it’s placement correctly to align with your risk manageement)
and by comparison
a trailing stop is one that MOVES
and IT CAN MOVE IN 2 WAY
MANUALLY or AUTOMATICALLY
and yes… Manually is smarter (i think i mentioned that)
Now. as for this
of course this is true
but, THE QUESTION WAS NOT “Hi guys, how do i maximize my income and return”
the QUESTION WAS… “what is a trailing stop”
You’ve taken a point that was supposed to taken really lightly and intended for a lamen
and you’ve scrutinized the crap out of it
you can’t do that, because, my answer was not written to be Precisely correct so that it would withstand any srutiny.
it was written more so for conveying an idea and creating understanding
then… once the concept of a trailing stop is understood the by the OP
THEN… YES… they can get into the fine details of it ok
i hope this clears it up a bit
1 Like
Martin, I know you’re only trying to help people, which is great, but if you’re explaining something to a layman you need to keep it brief, accurate, and to the point.
I honestly haven’t “scrutinised the crap” out of your post, I only noticed the comment I mentioned because you typed it in capitals.
Namaste
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Tell me why i NEED to do this ?
Mate, at the end of the day… all that matters is this
DID THE OP UNDERSTAND
or
DID THEY NOT
that’s it
Now. if i type 500 lines of text, but the OP Understands,
then… that is what was needed to explain it
some people need more explanation than others
and some people require an explanation from a certain person that can understand how they think and thus can relate to them
I cater post to people who ask the questions
some posts are longer, some are shorter
generally , it tends to be that , if i’m a talking to an experienced person, it’ll generally be shorter.
if i’m talking to a lamen or someone who needs clarification it’ll be longer
of course
as for this…
you actually have
and i know YOU PREFER that you haven’t, but you actually did
in saying that… I have not taken it personally, but, it is what it is. You’ve scrutinized it.
here… Look
then you went on to explain… right ?
that’s Scrutiny
so… just accept it
if you want this to be short
Just understand this
it was not written to be 100% dead set accurate
it was written so that a beginner can understand it
simple as that.
and just to be clear
I’m not angry
i’m not upset
i don’t care if you disagreed with me
but i feel that you took a point and just analyzed the hell out of it when it didn’t need to be analyzed
the point of the OP’s question is that THE OP UNDERSTANDS THE ANSWER, Regardless of who it comes from
now, that can be from me with a wall of text
or
it can be from you with 1 word
the point is that the OP Understands it
so… let’s ask the OP if they understand it yet… Shall we
and if they do, we can put this to rest
if they don’t
well then… clearly the way i’m explaining it is not getting through
so maybe someone else can take a crack at it.
What are your thoughts on this
LOL… How did you guess
Actually i’m a bit tired now and can’t manage 5,000
i was thinking maybe i’d limit it to like 300 words and be off to bed, i’m tuckered out from the NYE celebrations
LOL
Looks like you were right 
Hh Hem i think u will find th OP got it after my post .lol
But i like how Martin expands in case other points are missed.
1 Like
hehe
oopps sorry, Respect where Respect is due
ALL BOW DOWN AND HAIL @A1lenTrader hehe
ACTUALLY… in seriousness , i didn’t see that post, if i had known i would not have responded.
not sure how i missed it
but ok… THE TWINKY goes to you in this instance for answering the OP’s question to the satisfaction of the OP
Your “Hh Hem” IS ACKNOWLEDGED hehe