How To Use Trailing Stop Loss

A trailing stop loss can be found on MT5 platforms. When the market is moving in your favor it automatically adjusts your stop loss to ensure you secure some profits.

To set up a trailing stop loss, enter a trade, set your traditional stop loss, then right-click on the stop loss line (on the chart) and select trailing stop.

You can choose the number of points you want your trailing stop to adjust by.

If you select 5 point it will follow the market price closely and secure more profits.

if you select a bigger number like 20 points it will follow the price from a farther distance and secure less profits.

Thanks this is helpful.

You can set a trailing stop loss after you enter a buy or sell position. Do this by right-clicking on the buy/sell line on your MT4/5 chart, selecting trailing stop, then selecting the distance/points you want it to follow your profit by.

If you select 5 points, the stop loss will follow any profits you make very closely so you secure more profits; but the danger of following profits too closely is that you can get stopped out easily if the price reverses course by a bit.

If you select say 10 points, then the trailing stop will follow your profits by a wider margin meaning you secure less profits, but your chance of being stopped out is less.

The disadvantage of setting the trailing Stop directly from the Buy/Sell line is that the trailing stop will not be activated until you start making a profit.

To avoid this, you can set the Trailing Stop by first manually setting an ordinary stop loss, then right-clicking on the ordinary stop loss line on the charts then selecting trailing stop. See my next image

When you set your trailing stop loss from the red stop loss line (meaning after manually setting a stop loss), the stop loss is already in effect/alive and this is a better way of setting up a trailing stop loss.

Use any method you like

So the Trailing Stop Loss is only available on MetaTrader?

Trailing Stop Loss is also available on cTrader

A Trailing Stop Loss is one of the best features of the MT5 platform and is a must use if you are trading during important economic data releases like Nonfarm Payroll (NFP).

Trailing Stop Loss is a must use because during NFP trading, the prices move so fast that it is impossible to exit at the desired profit you want.

Many times during NFP trading, the MT5 platform freezes and locks you out so you lose control of your account. if you has set your Trailing Stop, the automation will follow the profits and stop you out even if the MT5 platform freezes.

The reason the MT5 freezes during NFP trading is because the platform is overwhelmed with orders. Some people say the brokers close the MT5 intentionally but i dont know about that.

To be safe learn how to use Trailing Stop Loss effectively

I only use Trailing Stops in Highly Volatile markets. Using trailing stops in slow moving markets will only make you get stopped out prematurely.

To set a trailing stop, I first set my regular stop loss then right-click on the stop loss line & select trailing stop.

I always select to trail any profits I make by 5 points so that the system will always secure the current profit less 5 points. This gives space for the candles to breathe without the trailing stop being triggered.

Its like driving a car, you don't need to be too close to the bumper of the car in front of you because of sudden braking impact.

Setting up a Trailing Stop loss requires you open the order first, then right-click on the order line & select trailing stop loss. You will be asked to choose the number of points that the price will move in your favor before the trailing stop is activated.

If you choose 10 points, then when price moves in your favor by 10 points the trailing stop will be also move with it to secure some profits for you.

Before you set a Trailing Stop Loss, right click on the chart and select properties. Then tick the "Show Trade Levels" box.

By ticking ticking the show trade levels box, when you open your order, a line will appear on your chart marking where the order was placed.

To set the Trailing Stop, right-click on this line, and select trailing stop. Choose a number of points by which the trailing stop will follow the price when it moves in your favor.

Remember that the Trailing Stop only moves when the price is moving in your favor but when price is moving against you, the trailing stop does not move back- it remains at its last position and you get stopped out 9while securing some profit)

Before I set my trailing stop, I will first of all set a normal stop loss because trailing stops only get activated when you start making profit. So setting a normal stop loss will protect you from immediate price reversals.

After I set my normal stop loss, I right click on the stop loss line on the charts and select trailing stop.

I then set the number of points or pips of profit that I want the trailing stop loss to secure. If I select 5 points, then when price moves 5 points in my favor the trailing stop automatically adjusts itself by 5 points. When price moves another 5 points in my favor, the trailing stop adjusts again by 5 points. It keeps doing this till price starts reversing and hits the trailing stop then it will close me out of the market with profit.