Giordano Salvatori, founder of STA · 30/10/2026 · 6 min read
A trailing stop is a stop loss that moves by itself when the price goes in the right direction and stays put when it goes the wrong way. A normal stop loss is a fixed level: if you buy at 100 and set it at 95, it stays at 95 even if the price climbs to 130. A trailing stop instead «follows» the price at a distance you choose, in points or in percentage, and protects part of the gain that has built up in the meantime.
An illustrative example, with invented numbers. You buy at 100 with a trailing stop at distance 5. The stop starts at 95. The price rises to 110 and the stop rises to 105. The price falls to 107: the stop stays at 105, because it never moves back. If it then drops to 105, the position closes there, with a gain of 5 instead of a loss of 5.
A fixed stop loss tells you how much you are willing to lose. The trailing stop, once the price has moved in your favour, tells you how much you are willing to give back. They are two different functions of the same tool, and they do not exclude each other: you almost always start with a fixed stop and only later, if the trade goes well, does the stop begin to follow the price.
If it is not yet clear how to choose the first level, start from stop loss: what it is and how to set it, because a badly placed trailing stop on a wrong initial stop fixes nothing.
This is the question where people get it wrong most, because the distance does all the work. If it is too tight, the price touches it with the normal swing of any given day and throws you out of a trade that would have gone very well. If it is too wide, it protects little and you give back much of the gain before exiting.
There are three common approaches:
There is no right distance in absolute terms. There is a distance consistent with the volatility of the instrument and with how long you want to hold the position. One thing you can do without risking money: try several distances on a demo account and see, over twenty trades, how many early exits and how much returned gain they produce.
It works best when the market has a direction and you want the gain to grow without having to watch the screen every ten minutes. It is the natural ally of those who follow the trend, meaning the prevailing direction of prices, and of those who have no precise price target but prefer to exit when the move runs out of steam.
It works worse when the price moves sideways, with no direction. In a sideways market the trailing stop is hit again and again and every exit costs spread and fees. It is one of the reasons why, for those who prefer a fixed target, there is the take profit: the two tools can also be used together, with the target closing the position if it is reached and the stop protecting it if the move stalls first.
It is worth knowing them before trusting it too much.
Position size remains the first defence. We explain how much to risk before entering in the guide to risk management in tradingand you can work it out with the position size calculator.
Yes, on one condition: that it does not become one more parameter to tweak on every candle. The typical risk for a beginner is to tighten the stop every time they get nervous, or to widen it when the price gets close. In both cases it is no longer a trailing stop, it is a decision made by anxiety. Choose the rule before entering, write it down and stick to it. If you recognise yourself in this pattern, the trading psychology explains why it happens and how to limit it.
The big picture, from the basics to the costs, is in the guide to mindful online trading. To understand how the gains and losses of a trade are measured, use R in trading.
Every STA card is born with a stop decided before the entry, together with entry and target, and the stop moves when the price goes in the right direction. How and when it does so is part of the method that we do not disclose, but the principle is the one in this article: protection first, then the gain. Ten artificial intelligence agents analyse the markets twice a day, with a debate between a Bull and a Bear, and the funds stay on your OKX account.
The DEMO is free forever, with real prices and the same cards as the REAL, and it is a good place to see how a stop that follows the price behaves without risking a euro. You need an account. In the launch phase, which began on 16 October 2026, STA fees are temporarily disabled, in REAL too; the ordinary price list, suspended while the launch lasts, is 18% of the positive net result of each day, with no offsetting of losses. The history of the cards, losses included, is public on GitHub.
Every card as soon as it closes, with the result and what STA learned from it. It's free and you don't need to sign up.
Follow the channelA DEMO account with virtual capital and real prices, the same cards as REAL users.
Try DEMO for free →This article is for information only and is not investment advice. Trading crypto-assets involves a high risk, including the total loss of the capital used. Numerical examples are for illustration.
Trading psychology: the 5 emotional mistakes that cost the most (FOMO, loss aversion, overtrading) and concrete rules to keep them in check.
Risk management in trading: how much to risk per trade, how to calculate the position and how to use a stop, with made up examples and a demo account.
Trading online with artificial intelligence: what AI can do, what it can't, how to try it on a demo account and how to spot those who promise too much.
