Trailing Stop is one of the most common practice in Risk Management. It is an important task in many strategies to limit losses and secure profits. Trailing Stop simply means to move the Stop Loss price in favour of the trade in some situations. You can automate this task through a Trailing Stop EA in Metatrader.
What Is A Trailing Stop Loss
So what exactly is a Trailing Stop?
Trailing Stop is the short form of Trailing Stop Loss and it is the activity of moving the Stop Loss price when the current price moves in favour of your trade.
Say for example you open a long (buy) position in EURUSD at price 1.1200 and you set the stop 20 pips away (1.1180).
The price then moves to 1.1220 and you move the stop loss to 1.1200.
The price moves again to 1.1240 without hitting your stop and you move the stop to 1.1220.
You are basically applying a trailing stop. You are moving the Stop Loss following the price, until you eventually hit your Take Profit Target or the Stop Loss.
As you can see later in this article there are several types of Trailing Stops.
You can apply it following an indicator or following a fixed distance from the current price.
You also need to know that there are several Expert Advisors (EA) that can automate this process.
Why Using A Trailing Stop
Using a trailing stop is a very common practice between beginner and experienced traders.
It is often implemented in the rules of Risk Management for several strategies.
There are many benefits in executing this task and the mains are:
- If the trade is still in loss you can limit your losses
- when the trade is profitable you can secure profits
- you can avoid margin calls if there are sudden big moves against your trade
Do not underestimate the use of a trailing stop because it can be the difference between a losing and a profitable strategy.
This Package Includes All The Following Trailing Stop Expert Advisors
Difference Between Trailing Stop And Stop Loss
Trailing Stop and Stop Loss are closely related but there is a key difference between them.
The Stop Loss price is a price recorder in the trade that when hit will immediately close the trade.
The Trailing Stop is that activity of updating the Stop Loss Price when the price moves in favour of the trade.
It is very important to understand that the two are executed in Metatrader in different ways.
The Stop Loss Price is registered on the server together with the trade, so if that price is hit by the current price the server closes the trade.
The Trailing Stop on the other side is performed on the client side, meaning that you configure it on your terminal and your terminal must be open to update the Stop Loss Price.
In other words, you cannot have a Trailing Stop working without having your Metatrader software running.
Auto Trailing Stop EA In Metatrader MT4 And MT5
I find the auto trailing stop in Metatrader too limited.
I believe it is too simple and does not include some other important features.
It would be useful to have more functions like:
- Ability to apply Trailing Stop to some selected Trades only
- Filtering the trades with trailing stop by Magic Number
- Filtering the trades with trailing stop by Comment
- Send a notification if the stop loss is updated
- Ability to use more complex function or indicators to trail the stop loss
There are many Expert Advisors that can assist with the Trailing Stop and that include many functionalities.
MT4 Trailing Stop Expert Advisor Package
This package includes all the Trailing Stop EA developed here. It is a great deal because you can have all of them without having to purchase separately, AND, it is cheaper! These EA allow you to automate the trailing stop process and save you time. All the EA include notification features to receive alerts when the indicators satisfy some conditions. This can improve your trading and reactivity. You can test the EA individually with their demo versions.
If you have any question please leave a comment below or feel free to Contact Us.