What is Trailing Stoploss?

The trailing stop loss is a Financial Market strategy that allows traders to set a dynamic stoploss according to market direction and protect trades from losses. Once a trade has gone into profit for some pips, the stoploss is trailed near to the current price, if the price tries to reverse, the trade will be closed immediately in profit. Thus the trailing stoploss closes out a trade-in profit and provides an optimum exit point.

Let’s take a look at the below picture for a better understanding of the Trailing stoploss strategy.

Where to Use Trailing stoploss?

• The trailing stoploss is used in financial trading such as forex trading, cryptos, and stocks trading etc.
• The trailing stoploss is used where traders are unsure about how long the price will move and they could not decide Takeprofit level.
• The trailing stoploss is used where the market often reverses after some pips go into profit.
• The trailing stoploss is used when traders want to lock some profits so, that their trade does not close out below the locked profit level.
• The trailing stoploss is used where a precise exit level is needed.
• The trailing stoploss is used in grid trading (such as martingale), to minimize drawdown.

Advantages of Trailing stoploss:

• The trailing stoploss provides the highest profit level for trades allowing trades to close in profit before market reversals.
• The trailing stoploss makes sure that the trade does not close into the loss.
• The trailing stoploss locks a certain amount of profit so that trade never closes below the locked profit level.
• The trailing stoploss offers an optimum exit point for Buy Sell trades.
• The trailing stoploss reduces drawdown and margin call risk in Grid trading such as Martingale, Hedging, Averaging, etc.

Benefits and Considerations of Trailing Stop Loss in Trading:

Risk management: Trailing stop loss is an important strategy for risk management in trading. It allows traders to limit potential losses by automatically closing out a trade if the market reverses. By setting a trailing stop loss, traders can define their risk tolerance and protect their capital.

Flexibility: Trailing stop loss offers flexibility to traders by adapting to changing market conditions. As the price moves in their favor, traders can adjust the trailing stop loss to lock in profits while still allowing room for the trade to continue if the market continues to move favorably.

Psychological benefits: Implementing a trailing stop loss can help traders overcome emotional biases and make rational trading decisions. It eliminates the need for constant monitoring of trades and reduces the temptation to prematurely close a winning position or hold onto a losing one.

Volatile markets: Trailing stop loss is particularly useful in volatile markets where prices can fluctuate rapidly. It helps capture profits during price spikes while protecting against sudden reversals.

Experimentation and Optimization: Traders can experiment with different trailing stop distances and steps to find the optimal settings for their trading strategy. By backtesting and analyzing the performance of different trailing stop configurations, traders can refine their approach and improve their trading results over time.

How to use trailing stoploss effectively:

The trailing stoploss comes with the following inputs:

• Trailing Distance / Activate

It specified the amount of profit that a trade must generate before trailing its stoploss. If the trader increases ‘Trailing Distance’ then trailing stoploss triggers late. Set a trailing distance of 8-20 pips on Forex pairs and $2-$50 on Stocks and Cryptos.

• Trailing steps

The trailing steps are the number of steps a trailing stop must take. If a trader specifies a small value then stoploss is modified very close to the market price, even if it can close out trades quickly. If the steps are too big, the stoploss might be modified too away from the market price. Set a trailing stop of 6-15 pips on Forex and $2-$30 on Stocks and Cryptos.

• Trailing Stoploss via EA

Use any EA auto-trading bot for trailing stoploss. Because the trailing stoploss is a quick strategy that must be triggered and managing the stoploss in milliseconds.

Trailing stoploss EA robot:

The trailing stoploss must be triggered very quickly because the financial market moves rapidly. The stoploss must be modified as the market moves in a favorable direction. It is difficult to trail the stoploss manually. We have EAs that trail the stoploss of all the currency pairs and all the charts. So that trader does not need to worry about market reversals and price fluctuations.

The 4xPip Trailing stoploss EA is designed to implement a trailing stoploss strategy for all the trades and all the charts of the MetaTrader 4 platform. The traders just have to focus on trade entry and worry-free trading. The trailing sell order works hassle-free with 4xpip trailing stoploss EA. Likewise, the trailing buy order also works hassle-free with 4xpip trailing stoploss EA.

Why 4xpip Trailing stoploss EA?

• No human monitoring: The 4xpip trailing stoploss EA offers best-trailing stoploss to automatically trails the stoploss intelligently.
• No worry about market reversals: Traders can do worry-free trading by just focusing on the trade entries.
• No human emotions: The 4xpip EA trails stoploss as per market conditions and keeps human emotions away from trading.
• Universal Bot: The 4xPip Trailing Stop EA applies to all currency pairs on MT4. Regardless of the specific currency pair on which the EA is installed, it will trail and manage the stop-loss levels of all open trades across different currency pairs.
• Profit Protection: The trailing stop functionality is designed to protect profits by dynamically adjusting the stop-loss level as the trade moves in the trader’s favor. It allows traders to capture more significant gains during favorable market conditions while protecting against potential reversals.
• Customizable Parameters: Traders can customize the trailing stop parameters such as trailing start pips, trailing step pips, and ATR settings.
• ATR settings: The 4xPip Trailing stoploss EA provides traders an option to either adjust trailing stop loss according to pips or ATR.
• Currency pair settings: As it is a multicurrency EA, that offers three types of multi-currency settings:

• Allow trailing stoploss only for the current chart

• Allow trailing stoploss for all currency pairs and charts

• Allow trailing stoploss for specific currency pairs and charts.

• Free assistance & support: The 4xPip has a dedicated team of expert programmers and traders. The 4xPip programmers make customizations and provide assistance in Trailing stop EA installation for Free.
• Vip customer support: The 4xPip team offers vip customer support. A user just has to contact them via the contact page or through telegram and a support agent will be connected with you to resolve your queries and blockers immediately.

4xPip offers a Trailing Stoploss EA for both MetaTrader 4 and MetaTrader 5 platforms.