What are trailing stops in FOREX and how do they work?

Question

I'm a little confused on them

Answer 1

A STOP ORDER IS PLACED BELOW OR ABOVE THE MARKET. USUALLY ON THE DOWN SIDE A PERSON WILL PLACE A SELL STOP TO LIMIT LOSSES. IF YOU BUY AT A PRICE AND THEN IT DROPS AND YOU DO NOT REGUALRLY WATCH THE MARKET YOU COULD BE IN FOR A BIG LOSS. THATS WHY YOU PUT A STOP IN TO LIMIT YOU LOSS.

Answer 2

A trailing stop moves automatically as the price of your investment moves. Suppose you're long and your vehicle is moving up. You may have bought it at 2500 with a stop at 2495. Your vehicle moves to 2510 and your stop automatically moves up with you to 2505.

A trailing stop can be mental: in other words, you have to keep up with the investment and constantly change your stop. Or on some trading platforms the stop is automatically adjusted.

Either way, the concept of the ts is that the stop moves as the value of your trade moves.

The idea of the ts is not just forex. All markets use the term. But when you trade you will be using a specific broker and platform, so how it's set up in your particular case will be specific to your broker.

Answer 3

Placing a trailing stop order means that as the market rises, the stop will follow the trend, setting itself higher than the trader's initial investment. This exclusive tool guarantees that the trader will always keep a position higher than the original, thus fixing his profits and restricting his losses automatically.

The trader can restrict his future losses by placing an order instructing the trading platform to buy or sell, the moment the market drops below the previously established price.

Finexo's advanced trading platform provides the trader with the trailing stop: a unique tool, that goes far beyond the regular stop-loss. Placing a stop-loss within Finexo's sophisticated trading platform decreases the risk for the trader, as the system will close the trade if the market value drops below the point defined within the order, thus limiting the losses.