Trailing Stop-Loss
A stop-loss whose trigger price follows a favourable move at a fixed distance and never moves back.
How it is identified
For a long position: Trigger = Highest Price Since Entry - Trail Amount
Unit
qualitative
In depth
A trailing stop converts a loss-limiting device into a profit-locking one: as the price rises the stop ratchets up, and it stays put when the price falls. The trail distance is the entire design decision — too tight and the position is shaken out by normal retracement, too wide and a large part of the gain is given back. Distances are usually set from a volatility measure such as average true range rather than a round rupee figure. A trailing stop does not guarantee the locked-in profit either, since the exit still executes at whatever the market offers after the trigger.
Worked example
Long at ₹500 with a ₹25 trail. The price rises to ₹600, so the trigger has ratcheted to 600 - 25 = ₹575. A fall to ₹575 exits with a gain of ₹75 a share instead of the ₹100 at the peak — the trail's cost of staying in.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Trailing Stop-Loss” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.