Trailing Stop Loss is an often overlooked, yet extremely helpful feature. It can help you automate the trading process, manage risks and make the overall trading experience more consistent. Moreover, this feature can help you expand the pool of available technical tools.
Even if you have never heard of this feature before, make sure to read this piece, as it will probably make your trading journey more diverse and offer new opportunities along the way.
As you probably already know, IQ Option clients have an opportunity to close their deals automatically when the price level reaches a certain predetermined level. It can be used to take profit when there is a risk of a trend reversal. In this case the trader will have to specify the “When profit is” amount. The same feature can also be used to stop loss. In this case the trader would want to fill in the “When loss in” field. Usually a combination of both is applied, as it helps to manage risks and take the money when the time is right.
How exactly does trailing stop loss work? The stop loss threshold is usually calculated as a percentage of the opening price and can go as low as −95% (sometimes even lower). When the trend is in your favor, the deal will not be closed until the current price goes below the opening price. Trailing Stop Loss will automatically move your stop loss threshold up (in the case of a BUY deal) or down (in the case of a SELL deal). In other words, the trade will close when it has already generated a certain level of profit, but the trend is about to reverse.
You could, therefore, use Trailing Stop Loss when the trend moves in the direction you want to but can change its direction at any moment. Please note that the feature will work even if you close the application.
