A trailing stop order for long position sets the stop order at a fixed by the trader amount below the market price and “trails” that order when the market moves up. As the market price rises, the stop order moves up by the trail amount, but if the stock price falls, the stop loss price doesn't change, and a market order is submitted when the stop price is hit. This technique is designed to allow an investor to set a limit on the maximum possible loss, without setting a limit on the maximum possible gain. Trailing stop orders for short positions are the mirror image of trailing stop orders for long positions, and are most appropriate in a falling markets.