Search
Results for “Trailing stop vs Stop-loss order”
Trailing stop
A trailing stop is a stop order whose trigger price follows the market at a set distance, a percentage or an amount. As the price moves in your favour the stop moves with it; when the price turns against you, the stop stays put and triggers if reached.
What it means for you. A trailing stop can lock in part of a gain without you watching the screen, but the distance you choose matters: too tight and ordinary swings sell you out early, too wide and you give back much of the gain. Once triggered it usually becomes a market order, so the fill can land below the trigger.
Sources: SEC Investor Bulletin: Stop, Stop-Limit, and Trailing Stop Orders, SEC Investor Bulletin: Understanding Order Types · checked 4 October 2026
Stop-loss order
A stop-loss order is an instruction to sell, or buy back, automatically once the price reaches a level you set, called the stop price. When that price is hit, the order becomes a market order, aiming to cap a loss on a position you hold.
What it means for you. A stop price is a trigger, not a guaranteed price. In a fast or thin market your sale can fill well below the stop, and a brief dip can trigger the sale before the price recovers. Once executed, the trade cannot be undone. Platforms differ on whether the last trade or the quotes trigger it.
Sources: SEC Investor Bulletin: Stop, Stop-Limit, and Trailing Stop Orders, FINRA: Stop Orders: Factors to Consider During Volatile Markets · checked 4 October 2026