Trailing stops has a particular significance in relation to IG's platform. Here, we define trailing stops in general investing and explain what it means to you when trading with IG.
A trailing stop is a type of stop-loss that automatically follows positive market movements of an asset you are trading. If your position moves favourably but then reverses, a trailing stop can lock in your profits and close the position.
On a long position, a trailing stop will be set below the current market price of the asset being traded. On a short position it will be above the current market price. It is set at a percentage level or set amount of points away from the market price of any given asset, and as it moves it maintains that distance from the current price.
Trailing stops are used to protect the profits on a successful trade, differing from other types of stop that are intended only to minimise losses.
We offer trailing stops on our platform. To activate them, simply go into your account preferences, and select 'allow trailing stops'.