How does a Trailing Stop work?

You can set up a Trailing Stop on MT4 by right-clicking on an open trade, selecting “Trailing Stop” and clicking on the points value required.

As soon as you do this, the system starts to automatically check with each new incoming quote whether the trade is profitable. Once the profit in points becomes equal to or higher than the Trailing Stop level you have specified, the terminal automatically places a Stop Loss at that same specified distance from the current price (in other words, at your open price).

If the price becomes profitable for your trade direction, the Stop Loss will follow it with the same predefined distance.

If price goes in the opposite direction, Stop Loss will not be modified and will be eventually triggered if market continues moving in that direction.