What is a Trailing Stop order?

A trailing stop is designed to protect profits by enabling a position to remain open as long as the price moves favorably, closing the trade as soon as the price changes direction by a specified difference, depending on how the market moves and the specified difference from the current price. A trailing stop may close your position at either profit or loss. Trailing stops are subject to “slippage” (price gaps mainly caused by volatility), and the position may not close at the exact specified price.