{"id":14433,"date":"2026-05-27T07:42:48","date_gmt":"2026-05-27T07:42:48","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/trailing-stop-order\/"},"modified":"2026-05-27T07:42:48","modified_gmt":"2026-05-27T07:42:48","slug":"trailing-stop-order","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/trailing-stop-order\/","title":{"rendered":"Trailing Stop Order"},"content":{"rendered":"

A trailing stop order<\/a> is a dynamic stop-loss order that automatically adjusts the stop price as the market price moves in the investor’s favour. It locks in profits by moving the stop-loss up (for long positions) as the stock rises, while keeping the stop at the new higher level even if the stock temporarily falls.<\/p>\n

What Is a Trailing Stop Order?<\/h2>\n

Instead of a fixed stop price, a trailing stop moves with the market:<\/p>\n

– For a **long position** (stock bought): the trailing stop moves up as the stock rises but does not move down if the stock falls
\n– For a **short position**: the trailing stop moves down as the stock falls but does not move up if it rises<\/p>\n

The trailing amount is specified either as:
\n– **Absolute amount**: stop trails by Rs 10 (if stock is at Rs 200, stop is at Rs 190; if stock rises to Rs 220, stop moves to Rs 210)
\n– **Percentage**: stop trails by 5% (if stock at Rs 200, stop at Rs 190; if stock rises to Rs 250, stop at Rs 237.50)<\/p>\n

Trailing Stop vs Fixed Stop-Loss<\/h2>\n

| Feature | Trailing Stop | Fixed Stop-Loss |
\n|———|————–|—————-|
\n| Adjusts with price | Yes (upward) | No |
\n| Locks in profits | Yes | No |
\n| Downside protection | Yes | Yes |
\n| Flexibility | Higher | Lower |<\/p>\n

Practical Use<\/h2>\n

A trailing stop allows investors to participate in a strong uptrend without manually moving stop-losses, while still having automatic downside protection if the trend reverses.<\/p>\n

Practical Example<\/h2>\n

Priya buys a stock at Rs 100 and sets a 10% trailing stop (Rs 10). The stop activates at Rs 90 initially. Stock rises to Rs 150: trailing stop moves to Rs 135 (Rs 150 – Rs 15). Stock then falls from Rs 150 to Rs 135: the stop triggers and Priya sells at Rs 135, capturing Rs 35 profit (35%) instead of the full Rs 50 upside but also protected from further decline.<\/p>\n

Key Takeaways<\/h2>\n

– Trailing stop orders automatically move the stop-loss in the direction of the trend
\n– For long positions, the stop moves up as the stock rises, locking in increasingly more profit
\n– The stop does not move back down, protecting gains already accumulated
\n– Set as an absolute amount (Rs X) or percentage (%)
\n– Useful for trending stocks<\/a> in bull market<\/a>s; reduces need for manual stop-loss adjustments<\/p>\n","protected":false},"excerpt":{"rendered":"

A trailing stop order is a dynamic stop-loss order that automatically adjusts the stop price as the market price moves in the investor’s favour. It locks in profits by moving the stop-loss up (for long positions) as the stock rises, while keeping the stop at the new higher level even if the stock temporarily falls. […]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-14433","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"A trailing stop order is a dynamic stop-loss order that automatically adjusts the stop price as the market price moves in the investor’s favour. It locks in profits by moving the stop-loss up (for long positions) as the stock rises, while keeping the stop at the new higher level even if the stock temporarily falls.…","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14433","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14433\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=14433"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}