Trailing Stops

A stop that moves up as price rises: how percentage and dollar trailing stops work, how to choose the distance, and the trade-offs of letting winners run.

A stop that follows you

A trailing stop moves automatically as the stock moves in your favor. You set a distance, either a percentage or a dollar amount, and the stop follows the stock’s highest price at that distance. If the stock rises, the stop rises. If the stock falls, the stop stays put. When price falls back by the full trailing distance from its peak, the stop triggers.

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