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Trailing Stop

A type of stop loss order that moves relative to price fluctuations.

In example, setting a 50-pip trailing stop on EUR/USD after buying it at 1.2550 would mean that if price rose to 1.2600, your stop would also rise by from its initial level of 1.2500 to 1.2550 (50 pips).

Your stop will then stay at 1.2550 unless price moves another 50 pips in your favor. This means that your trade will remain open for as long as price doesn’t go against you by 50 pips.

Traders often makes use of trailing stops to lock in profits while minimizing their risk.

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