Does a trailing stop always work?
When adding a trailing stop on an open position, there are three elements to take into consideration:
When adding a trailing stop to a new position, its activation level is calculated as: Stop level + stop distance + step distance (when long) Stop level - stop distance - step distance (when short) It is very important to remember that for a trailing stop to be added to an open position on our platform, the activation level must always be above the current market price when long, and below it when short. Example: Lets suppose you are adding a trailing stop on a Germany 40 long position, currently trading at 10,468.6. You add a stop level at 10450.6, set your stop distance at 15 and your trailing step at 5. 10450.6 + 15 + 5 = 10470.6, the level at which your trailing stop will be activated once the market hits it. 10470.6 is above the current market level of 10468.6, so your entry is accepted.
Please bear in mind that trailing stops are not guaranteed, and so can be subject to slippage. This means that they may not be executed exactly at the level youve specified. |