Trailing stop
Volume Profile Analysis glossary · Trading Strategies & Execution
Definition
A stop-loss that moves with the favorable trade, locking in progress while preserving continued upside. Implemented structurally, by ATR multiple, or by moving-average position.
Trailing stop in plain English
A trailing stop is a safety net that slides along behind a winning trade. Imagine climbing a ladder and, each time you step up a rung, you slide a safety rail up to just below your feet — if you fall, you only drop a little, but as long as you keep climbing, nothing stops you. That's the idea: as the price moves in your favor, the exit point (the price at which you'll automatically sell to cap losses) ratchets up with it, locking in gains, but it never moves backward. Traders set how far behind it trails in different ways — a fixed structure level, a multiple of how much the price typically wiggles (ATR), or the position of a moving average.
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