A trailing stop is a modification of a typical stop order that can be set at a defined percentage or dollar amount away from a security's current market price. For a long position, an investor places a trailing stop loss below the current market price. For a short position, an investor places the trailing stop above the current market price.1
A trailing stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the investor’s favor. The order closes the trad
Now understand Trailing Stop loss with an example.
Assume you bought a coin at the price of 100 and put the trailing stop loss at 90 (10 points below the buying price).
If the price drops to 90 then your stop loss will be activated and the trade is closed with a 10% loss.
But if the price of the coin increase to 130 then the trailing stop loss automatically shifts to 120 (means 10 points below the current price). If the price drops to 120 then the trade is closed automatically (the 120 trailing stop loss will be activated), If the price continues to increase the trailing stop also increase with it and remains always 10 points below the current price.
Currently, BINANCE only supports trailing stop loss for the Futures market but sooner we will see the feature for spot trading also.
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