Trailing Stops to Protect Gains

Use trailing stops as a profit-taking tool: moving-average, swing-low and volatility-based trails, how to choose between them, and a real DELL example.

From order type to exit plan

The Trailing Stops lesson in the Types of Orders category explained how trailing stop orders work mechanically. This lesson looks at trailing stops as a profit strategy. The idea is simple: once a trade is working, you move your exit up behind the price, so the stock can keep rising while more of your gain is protected. You never sell at the top, but you let the market tell you when the move is over.

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The rest of this lesson, its chart examples and quiz are part of Investing School. Start free with Stock Market Fundamentals and the first lesson in every category.