Trailing Stop
Stop-loss that automatically moves with price, protecting realized profit.
A trailing stop is a dynamic stop-loss that automatically moves in favor of the position as price rises — but stays in place if price falls.
Example:
•You bought BTC at $60,000, set trailing stop at 5%
•Initial stop: $57,000
•BTC goes to $70,000 → trailing stop moves to $66,500
•BTC goes to $80,000 → trailing stop at $76,000
•BTC falls to $76,000 → stop activates, 26.6% profit locked in
Advantages:
•Captures trend — you don't exit too early in a rising trend
•Automatically protects profit without constant monitoring
•Flexible — can use % or fixed amount
Disadvantage:
•Brief volatility can trigger stop before trend continues (so-called "stop hunt")
•Not ideal for ranging markets