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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
A stop-loss that automatically moves up as the stock price rises, locking in gains.
Why It Matters
A trailing stop lets you ride winners while protecting gains. Set a 10% trailing stop on a stock at $100, and your stop is at $90. If the stock rises to $150, your stop automatically moves to $135. You'll never sell at the exact top, but you'll capture most of the move. The risk: volatile stocks can trigger your stop on normal swings, then keep going up without you.
Key Points
- Can be set as percentage (10%) or dollar amount ($5)
- Only moves up, never down - locks in gains as stock rises
- Useful for momentum stocks where you want to let profits run
Related Terms
Common Questions
A stop-loss that automatically moves up as the stock price rises, locking in gains. A trailing stop lets you ride winners while protecting gains. Set a 10% trailing stop on a stock at $100, and your stop is at $90.
A trailing stop lets you ride winners while protecting gains. Set a 10% trailing stop on a stock at $100, and your stop is at $90. If the stock rises to $150, your stop automatically moves to $135. You'll never sell at the exact top, but you'll capture most of the move. The risk: volatile stocks can trigger your stop on normal swings, then keep going up without you.
Can be set as percentage (10%) or dollar amount ($5)
Only moves up, never down - locks in gains as stock rises
Useful for momentum stocks where you want to let profits run