Trailing Stop Order Sample Clauses
A Trailing Stop Order is a type of trading order designed to automatically adjust the stop price at a fixed percentage or dollar amount below (for long positions) or above (for short positions) the market price as it moves in a favorable direction. As the market price rises, the stop price rises proportionally, but if the market price falls, the stop price remains unchanged. This mechanism allows traders to lock in profits by enabling the order to follow the market trend while still providing a safety net if the price reverses. The core function of a trailing stop order is to help investors manage risk and protect gains without the need for constant monitoring of market movements.
Trailing Stop Order. 2.5.1. The trailing stop order is a stop order as described above but the trailing stop price moves according to parameters set by the client. This way the trailing stop can be used to sell if the price drops more than a specified distance from the highest price traded or to buy if the price trades above a set level from the lowest traded price.
Trailing Stop Order. The trailing stop order is a stop order as described above with the only difference being that, instead of setting a price at which the order will be activated, the trailing stop order is activated at a fixed distance from the market price. For example, if a client has a long open position with a trailing stop attached to it and the market Ask price increases, the trailing stop price will also increase and will trail behind the market Ask price at the fixed distance set by the Client. If the market Ask price then decreases, the trailing stop price will remain fixed at its last price set and if the market Ask price reaches the trailing stop price, the order will be executed. Due to market gapping, the best available price that may be achieved could be materially different to the price set on the trailing stop order, therefore, trailing stop orders are not guaranteed to take effect at the fixed distance for which they are set. This type of order is only available on our MT4 Platform and MT5 Platform.
Trailing Stop Order. This instruction is a stop loss order which allows a client to lock profits and limit losses by enabling a position to remain open as long as the price is moving in the client’s favour, but as soon as the price changes direction and moves against the position by a specified amount of pips, the position will automatically close at the Trailing Stop level. The Trailing stop level can be set at a number of pips from the current market price and is automatically updated when the market moves in the client’s favour. Trailing Stop orders do not guarantee that a position will close at the exact Trailing Stop level. In cases where the market gaps up or down and the market price surpassed the designated Trailing Stop level, the position will close at the next best available price. If the ‘Trailing Stop’ rate is not reached nor surpassed then the trailing stop order will not be executed.