Optimizing Profit with Trailing Stop: The Complete Guide for Traders

Trailing stop adalah alat penting bagi trader yang ingin melindungi keuntungan sambil memberi ruang bagi pergerakan harga yang menguntungkan. Tidak semua trader dapat memantau posisi mereka sepanjang waktu, dan di situlah keunggulan trailing stop terletak. Pesanan ini secara otomatis menyesuaikan diri dengan pergerakan harga pasar, memastikan Anda tidak melewatkan peluang keuntungan maksimal.

What Is a Trailing Stop and How Does It Work?

A trailing stop is a type of advanced order that combines two main functions: maximizing profits and protecting against losses. Unlike a regular stop loss that remains fixed at a certain price level, a trailing stop continuously “follows” the market price upward, but remains stationary when the price declines.

The operation of a trailing stop is very simple: you set a specific distance from the current market price—either as a percentage or a fixed amount—and the order will automatically trigger when the price moves against your position by that predetermined distance. You can also set an activation price, which determines when the trailing stop begins to track the price movement.

The main advantage of a trailing stop is that you don’t need to constantly monitor the chart. It works automatically, giving you peace of mind while protecting your position from sudden losses.

Two Types of Trailing Stops: Percentage vs. Fixed Amount

Trailing stops offer flexibility through two modes that can be tailored to your strategy.

Percentage-Based Trailing Stop

In this mode, you set the distance as a percentage of the current market price. For example, you buy an asset at $100 and set a 10% trailing sell stop.

Here’s how it works:

• Scenario 1: Price drops 10% to $90 → the trailing stop order is triggered immediately, and your asset is sold at market.
• Scenario 2: Price rises to $150, then drops 7% to $140 → the order is not triggered. Why? Because the trailing stop is only triggered at $135 (10% below the highest price of $150).
• Scenario 3: Price rises to $200, then drops 10% to $180 → the order is triggered, and your asset is sold at $180.

The percentage mode is suitable for traders who want proportional protection across different price levels.

Fixed Amount Trailing Stop

Here, you set a fixed distance in monetary units. For example, an entry price of $100 with a $30 trailing stop.

Operational scheme:

• Scenario 1: Price drops $30 from $100 to $70 → the order is triggered, and your asset is sold.
• Scenario 2: Price rises to $150, then drops $20 to $130 → the order is not triggered. The trigger level remains at $120 (highest price $150 minus $30).
• Scenario 3: Price rises to $200, then drops $30 to $170 → the order is activated, and your asset is sold.

The fixed amount mode is more suitable for assets with consistent volatility or when you want very precise risk management.

Key Differences: Percentage vs. Fixed

Both trailing stop variants serve different purposes depending on market conditions and your preferences. The percentage mode is more adaptive to price changes—the higher the price, the larger the absolute protection distance. The fixed mode provides a set, predictable level of protection, ideal for assets with familiar price action.

Choosing between these modes depends on your position size, asset volatility, and profit targets.

Important Things to Know Before Using a Trailing Stop

Margin and Positions Remain Unfrozen

Your position and margin remain active and will not be frozen until the trailing stop order is actually triggered. Always ensure you have sufficient margin or balance to keep your position open. If margin is insufficient, your position may be forcibly liquidated before the trailing stop can activate.

Risk of Non-Activation

Although a trailing stop is an automatic tool, there are conditions where the order might not be triggered:

• Price or position restrictions: Extreme market conditions or platform system limitations
• Insufficient margin: If margin runs out before the trailing stop triggers
• Non-trading status: Maintenance or technical issues on the platform
• System errors: Rare bugs or glitches

Once the trailing stop is triggered and converts into a market order, it faces the same risks as regular market orders—possible partial fills or not being filled at the desired level. Unfilled orders can be viewed in the Open Orders section.

Optimal Strategy

Use trailing stops not only for exit but also as part of a broader money management plan. Combine with fixed stop-loss orders for worst-case scenarios, and understand the total risk of each position before applying a trailing stop.

With a thorough understanding and proper use, you can improve trading consistency and reduce emotional decision-making when exiting positions.