A trailing stop is the type of stop loss that keeps on modifying itself when the market price moves in the profitable direction. The key benefit of trailing stop is allowing trade to get closed in a chunk of profit when there is the uncertainty of the reverse movement of price after moving a bit in profit and reversing toward a drastic loss before hitting the take profit. If we are talking about the Trailing stop feature developed by experts of 4xPip, it allows you to modify and trail the stop loss of your trade in such a way that if the market reverses, the trade is always closed in the profit.
How it works
Our feature consists of 3 inputs:
1: Allow Trailing Stop? (true/false)
Here you can turn this feature on/off.
2: Trailing start pips
Profit in pips to activate the trailing stop.
3: Trailing step pips
A number of pips, the stop loss is away from the market price.
Often the market tends to move in profit but before it hits the Takeprofit, the market reverses its direction and hits the Stoploss resulting in a Loss ❌
Allow Trailing Stop? = true
Trailing start pips = 12
Trailing step pips = 6
The Scenario of a Buy Trade:
- Open Price = 1.0800
- When Market Price Hits open price + Trailing start pips which is 1.0800 + 12 pips = 1.0920
- Trailing stop gets activated 🚀
- Stoploss will be modified to market price – Trailing step pips which is 1.0920 – 6 pips = 1.0860
Every trade either closes at Stoploss or Takeprofit.
In both cases, the trade will always close in profit because the new Stoploss is in some pips of profit💰
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