What is a trailing stop-loss?

A trailing stop-loss automatically adjusts your stop level as the market price moves in your favour, locking in gains while still protecting against a reversal, instead of sitting at one fixed trigger price like a regular stop-loss. You set a trailing amount, either a fixed rupee value or a percentage, and as the stock price rises (for a long position), the stop price rises with it, always staying that fixed distance below the highest price reached. If the stock then reverses and falls by that trailing amount from its peak, the stop triggers and the position exits. Importantly, the trailing stop only moves in the favourable direction; if the price falls without ever rising further, the stop stays at its last adjusted level rather than moving further away. Not every broker or trading platform supports trailing stop-loss as a native order type, so you check whether it’s available before relying on it, since some platforms require it to be managed manually or through a separate algo feature.