Trailing Stops: What They Actually Do And When To Use One
The mechanics
Set a trailing distance in pips on a position (at open, or added later via Modify) and the terminal recalculates your stop loss on every price tick: for a buy, the new stop is always current bid minus the trail distance; for a sell, current ask plus the trail distance. The stop only ever moves in your favor — it can tighten toward the market as price improves, but it never loosens, even if price pulls back afterward.
The first tick after arming plants an initial protective stop at that distance behind the current price immediately — it doesn't wait for the position to be in profit first before offering any protection.
When it helps
Trailing stops suit a trending move where you don't have a specific take-profit target in mind and want to capture as much of the move as possible without babysitting the position — the stop does the exit-management work of gradually locking in more of the gain as price extends.
When it doesn't
In a choppy, range-bound market a trailing stop set too tight gets clipped repeatedly by normal noise before any real move develops. It's a trend tool, not a universal default — a fixed stop loss (or no stop, for a discretionarily-managed position) is often the better fit outside a clear trending environment.