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TrustFinance
10月 09, 2026
11 min read
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The Stop Loss set when opening a position remains fixed. If the price moves in a profitable direction, anyone wishing to lock in that profit must manually move the Stop Loss up, which means constantly monitoring the chart.
A Trailing Stop is a tool that automates this process. This article explains what a Trailing Stop is, how it moves with the price according to specific rules, how it differs from a regular Stop Loss, and a crucial detail often overlooked despite being clearly stated in platform manuals: on MT4 and MT5, this order operates on the trader's local machine, not on the server.
A Trailing Stop (or Trailing Stop Loss) is a Stop Loss that automatically moves with the price. Traders set a specific distance from the current price, for example, 30 pips. As the price moves in a profitable direction, the Stop Loss level adjusts accordingly, maintaining that distance. However, if the price reverses, the Stop Loss remains at its last adjusted level and closes the position when the price touches it.
The U.S. Securities and Exchange Commission (SEC) investor guide defines it similarly: a stop price is a specified distance from the market price, not a fixed price (SEC Investor Bulletin).
On MetaTrader 4 and MetaTrader 5, there's a detail often not mentioned in general articles: a Trailing Stop does not start moving immediately upon opening a position. The platform checks every time a new price comes in and places a Stop Loss only when the position's profit in points is equal to or greater than the set distance (MT4 Help, MT5 Help).
The unit here is important. The platform counts the distance in points, which is the smallest possible price movement for that asset (MQL5 Reference), not pips. For EUR/USD, which displays 5 decimal places, 1 pip equals 10 points. If you select "30" thinking it's pips, the actual distance will be ten times narrower than intended. The difference between pips and points is explained in What is a Pip? How to Calculate Profit/Loss per Pip.
Let's look at a hypothetical example (numbers are for illustration, not real data, and spread is not considered for simplicity). A trader buys EUR/USD at 1.10000 and sets a Trailing Stop at 300 points or 30 pips.
| Step | EUR/USD Price | Stop Loss Level | What Happened |
|---|---|---|---|
| 1 | 1.10150 | None yet | Profit of 150 points, not yet 300. Trailing Stop not active. |
| 2 | 1.10300 | 1.10000 | Profit reached 300 points. The platform placed Stop Loss 300 points away from the price, which matches the entry price. |
| 3 | 1.10800 | 1.10500 | Price continues to rise. Stop Loss moves up. |
| 4 | 1.10600 | 1.10500 | Price pulls back. Stop Loss does not move back. |
| 5 | 1.10500 | Triggered | Position closed near 1.10500, approximately 50 pips from the entry price, assuming no slippage. |
If a position already has a Stop Loss, that Stop Loss will move in the same way. Each time it is adjusted, the platform records it in the Journal (MT5 Help).
Both ultimately result in the same outcome: an order to close a position when the price reaches a certain level. The difference lies in who moves that level and which system performs the movement.
| Aspect | Regular Stop Loss | Trailing Stop on MT4 / MT5 | Server-side Trailing Stop |
|---|---|---|---|
| Who moves the level | Trader moves manually | Platform on the trader's machine | Platform's server |
| Where it's stored | On the server | The Trailing Stop itself is on the local machine; the Stop Loss it places is on the server. | On the server |
| After closing the platform | Still active | Stops moving; only the last Stop Loss level remains. | Continues to move |
| Guaranteed closing price | Not guaranteed | Not guaranteed | Not guaranteed |
| Reference | SEC | MT4 Help, MT5 Help | Example: cTrader Help |
The basics of fixed Stop Loss, such as where to place it, can be read in Smart Techniques: How to Set a Precise Stop Loss and How to Set Stop Loss and Take Profit. Stop Loss as a type of order, compared to Market, Limit, and Stop orders, is covered in How Many Types of Forex Orders Are There? How Do Market, Limit, and Stop Differ?
According to the manual, to set it, right-click on a position in the Trading tab of the Toolbox window (on MT4, it's the Terminal window), select the Trailing Stop command, and choose a distance from the list or click "Set custom level" to enter the distance manually (MT5 Help, Performing Deals). Step-by-step screenshots are available in How to Use MT4 / MT5 Risk Management Tools.
Rules specified in the manual:
The MT5 manual also states that a Trailing Stop can be linked to a pending order. When the pending order becomes an open position, the set Trailing Stop distance will continue to apply to that position. The MT4 manual, however, only describes linking it to already open positions.
No, it does not. This is explicitly stated in the MetaTrader 4 manual: a Trailing Stop operates on the trader's local machine, not on the server like Stop Loss or Take Profit. Therefore, it does not work when the program is closed. In such a case, only the last Stop Loss level placed by the Trailing Stop remains active (MT4 Help). The MT5 manual uses similar wording (MT5 Help).
Returning to the example, suppose the trader closes their computer when the price is at 1.10800 and the Stop Loss is at 1.10500. During that time, the price rises to 1.11500 and then gradually falls. If the platform were open, the Stop Loss should have followed up to 1.11200. But because it was closed, the Stop Loss remained at 1.10500, and the approximately 70 pips of profit the trader thought was locked in was lost along the way.
Many articles recommend Trailing Stops as a "set and forget" tool. While it's true you don't need to constantly watch the screen on MT4 and MT5, the program must remain open and connected.
Other platforms may be designed differently. For example, the cTrader manual states that its trailing stop loss operates server-side and continues to function even after the program is closed (cTrader Help). The point is not which platform is better, but that traders should read the manual of their chosen platform to understand where the Trailing Stop is processed.
Important Note: Forex trading is not yet licensed or regulated by any agency in Thailand. The Bank of Thailand does not have a policy to issue licenses for retail Forex businesses (Reference: Thai PBS), and the SEC itself confirms that the Forex business is not under the supervision of the SEC but rather under currency exchange control laws (Reference: The Standard).
This article is provided for general knowledge only and is not personal investment advice. No returns are guaranteed. Traders should conduct further research and assess risks independently before making any decisions.
Does a Trailing Stop guarantee profit?
No, it does not. If the price reverses before the profit reaches the set distance, on MT4/MT5, the Trailing Stop will not have placed a Stop Loss at all. Even if the Stop Loss has moved above the entry price, the actual closing price might be worse than that level if the price gaps.
How many pips should a Trailing Stop be set to?
There is no single number that works for everyone. The appropriate distance depends on the asset's volatility, the trading timeframe, and each individual's risk tolerance. What you should definitely check are the units used by the platform (points or pips) and the minimum Stops Level value.
Can a Trailing Stop be used with a Pending Order?
On MT5, yes. According to the manual, a Trailing Stop can be linked to a pending order and will start working with the position after the pending order is opened (MT5 Help).
How do Trailing Stop and Break-even differ?
Break-even is moving the Stop Loss to the entry price once the price reaches a specified distance (cTrader Help), whereas a Trailing Stop continues to move with the price.
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