A trailing stop is a closing stop order that automatically adjusts to market movements. This means that it follows the position when the market is in your favor, securing your profits, when a trend reversal occurs in the trend of an initially favorable position, a trailing stop can secure profits by closing the position.
For the "trailing stop order" there are two possibilities of use:
1. It can be activated when a specific target price is reached, and start following the price trend at the distance set on the "Callback Rate"
2. It can be activated immediately and follow the price trend at the distance indicated on the "Callback Rate"
You can insert a trailing stop from the basic trading section by checking the trailing stop box in the classic stop order section. When inserting the trailing stop it is necessary to set the activation price of the trailing stop and the distance at which the “Callback Rate” will follow market price. This one can be selected as a percentage or in currency, it consists of the extent to which the underlying market must move against you before the set trailing stop order is executed.
As for the basic trading interface section, the trailing stop activation price box is used to specify the time when the order will begin to follow the market price. If you want to activate trailing immediately the box must be left empty.
The “Callback Rate” box is used to indicate the distance at which you want the trailing to follow the price.
As regards the advanced trading interface, the activation of the trailing stop is defined by the positioning line;
for example, if you want to execute a sell order with a trailing stop to be activated following the
achievement of a certain price, the positioning of the line must be performed above the current price and will determine the activation price of the trailing stop, as in the example in the image below.
If, on the other hand, you want a trailing stop that follows the price immediately, it is sufficient to move the activation line below the current price, in this way the trailing stop will be activated immediately and begin to follow the trend, so the underlying market will have to move against you until the threshold indicated in the box "Callback Rate" to execute the order closing stop order.