Community Forex Questions
Pros & cons of a trailing stop loss order
Pros:
It automatically adjusts the stop loss level without requiring the trader to do so. Traders can use trailing stops to ride favourable trends while exiting when a reversal occurs.
Once the stop loss level is reached, positions must be exited. Trading with trailing stop loss orders allows traders to remove emotions from their trades.
Cons:
They make no guarantee that traders will receive an execution price close to their stop level if the price of a stock drops suddenly. As a result, trading volatile stocks with stops or trailing stops can be risky.
It automatically adjusts the stop loss level without requiring the trader to do so. Traders can use trailing stops to ride favourable trends while exiting when a reversal occurs.
Once the stop loss level is reached, positions must be exited. Trading with trailing stop loss orders allows traders to remove emotions from their trades.
Cons:
They make no guarantee that traders will receive an execution price close to their stop level if the price of a stock drops suddenly. As a result, trading volatile stocks with stops or trailing stops can be risky.
Sep 13, 2022 18:19