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What is a “Trailing Stop Order”?
A Trailing Stop Order is designed to protect profits by enabling a position to remain open as long as the price is moving in the right direction, but closing the trade as soon as the price changes direction by a specified number of pips.
Trailing Stop Order for Buy positions is used to protect profit as the instrument's price rises and limit losses when its price falls. Trailing Stop Orders for Sell positions is used to protect profit when the instrument's price falls and limit losses when its price rises. This feature is free of charge, but it is not guaranteed that your position will close at the exact price level you specify.
For example, you buy an instrument at a rate (price) of 1.5 where 1 pip = 0.1. You set a Trailing Stop Order at 5 pips therefore it sets a Stop Loss Order at the rate of 1.0. If the instrument's price increases in your favour to 2.2, then the Trailing Stop Order sets a Stop Loss Order at 1.7, therefore if the price then drops to 1.7 or below, the position will be automatically closed.
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