Topic: "Trailing Stop" - How does it work?
How does "Trailing Stop" exactly work and how it modify the exit order?
Re: "Trailing Stop" - How does it work?
You buy eur/usd long at 1.3344. place trailing stop loss at -20 pips. The price increases to 1.3366. The stop losss follows the price, and stop loss level now will be 1.3346, above your entry price. If price goes to 1.3388, your stop price will be 1.3368, so you can sleep in peace.
- Popov
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Re: "Trailing Stop" - How does it work?
I want to add that if you have a long position opened at 1.3388 with Tr. Stop -20 (1.3368) and you add 1 more lot to it at 1.3398 FSB will cancel the first Stop order and will place a new one at 1.3378 but with amount of 2 lots. The idea is that FSB does not average the stop orders but put a new one for all the opened lots at the nearest stop point.
FSB uses Tr. Stop orders valid till the end of the bar. At the beginning of the next bar FSB cancels the old order, recalculate the current stop price and places a new stop order.