A trailing stop-loss order is a risk management tool traders can use in volatile markets .
Read my brokers for trailing stop-loss orders listing to see my top brokers offering them, learn what a trailing stop-loss order is, how to use it, and its benefits and drawbacks.
- Plus500, multi-asset and CFD broker.
- AvaTrade, Highly regulated, choice of fixed or floating spreads.
- Pepperstone, Great ECN execution on MT4/5, cTader, TradingView and Pepperstone proprietary platform..
- BlackBull Markets, Best ECN trading environment, with scalping and hedging.
Plus500
In Summary multi-asset and CFD brokerI rank Plus500 among the most capable brokers providing trailing stop-loss orders for manual trading strategies. Traders benefit from a user-friendly, web-based proprietary trading platform and mobile app, which include a sentiment-based indicator. The data-driven analytical tool +Insights delivers competent research, and qualifying traders receive an invite-only premium service. ESG scores and fast withdrawals are also available.
Plus500 features real-time email, SMS, and push notifications based on price alerts, percentage-based hourly and daily price changes, and sentiment changes. Commission-free Forex spreads start from 0.6 pips or $6.00 per lot, and the well-balanced asset selection includes options, ETFs, and cryptocurrencies.
Pros & Cons
- Broad asset selection in equities and options
- Free and unlimited demo account
- Advanced free-of-charge analytical trading tools
- Global and regulated fintech platform
- Sub-standard trading platform without support for automated or social trading
AvaTrade
In Summary Highly regulated, choice of fixed or floating spreadsAvaTrade is among the brokers for trailing stop-loss orders on my listing for beginners. Besides industry-leading education via the Ava Academy, beginners get the MT4 Guardian Angel plugin and the fee-based Ava Protect insurance policy protecting against losses. Reasonable commission-free Forex spreads start from 0.9 pips or $9.00 per 1.0 round lot, while the $100 minimum deposit makes AvaTrade accessible to everyone.
Algorithmic traders get MT4/MT5, but AvaTrade also features its proprietary WebTrader and mobile app AvaTradeGO with Trading Central services and its specialized Ava Option and Ava Social trading platforms. AvaTrade additionally ranks among the best-regulated brokers.
Pros & Cons
- High quality educational offering via AvaAcademy
- Excellent choice of trading platforms catering to various trading needs
- Broad asset selection and cross-asset diversification opportunities
- Well-regulated and trusted broker with oversight from a central bank
- Trading costs competitive but nothing special
Pepperstone
In Summary Great ECN execution on MT4/5, cTader, TradingView and Pepperstone proprietary platform.I rate Pepperstone highly among brokers offering trailing stop-loss orders due to its super trading environment. Capitalise AI enables algorithmic trading in a code-free environment, which separates Pepperstone from most Forex brokers. VPS hosting provides 24/5 low-latency Forex trading, while APIs allow traders to connect advanced algorithmic trading solutions to the Pepperstone infrastructure.
Pepperstone offers low trading fees in its commission-based trading accounts, which feature raw spreads from 0.0 pips for a $6.00 commission per round lot. It also maintains a well-balanced selection, including cryptocurrencies and ETFs. Beginners receive a quality education, competent research, and 24/5 + 18/2 customer support.
Pros & Cons
- Excellent choice of trading platforms consisting of MT4/MT5, cTrader, TreadingView and Pepperstone Platform
- Market-leading MT4/MT5 upgrade package, Autochartist, and API trading
- Social trading support via Signal Start, MetaTrader Signals, Copy Trading by Pepperstone, DupliTrade
- Leverage of up to 1:400 depends on jurisdiction and superb trade execution
- Demo accounts have 60-day time limits
BlackBull Markets
In Summary Best ECN trading environment, with scalping and hedgingBlackBull Markets is one of the best brokers for trailing stop-loss orders on my listing for demanding traders requiring a superior trading environment. Traders benefit from competitively priced, commission-free, and commission-based ECN trading accounts. VPS hosting allows for 24/5 low-latency market access, while APIs ensure traders can connect advanced algorithmic trading solutions to the high-class BlackBull Markets infrastructure.
The excellent asset selection features 26,000+ assets, including 200+ currency pairs. Copy traders can use the embedded MT4/MT5/cTrader solutions, the proprietary BlackBull Markets alternative, ZuluTrade, and Myfxbook Autotrade. Black Bull Markets also connects social traders with 50M+ peers at TradingView.
Pros & Cons
- ECN/NDD execution model with deep liquidity
- Institution-grade pricing for retail traders via proprietary price aggregation
- ZuluTrade and Myfxbook for social trading
- Leverage of up to 1:500
- Limited deposit options
What is a Trailing Stop-Loss in Trading?
Brokers for trailing stop-loss orders offer a trailing stop-loss order, which is a stop order that moves with price action in a profitable direction. It is a risk management tool that protects traders against sudden price action reversals. Unlike a fixed stop-loss order, a trailing stop-loss order remains flexible.
How Does a Trailing Stop-Loss Work?
The trading platform at brokers for trailing stop-loss orders determines how to place a stop-loss order, but it works identically.
Here is an example of a trailing stop-loss:
- A trader buys the EUR/USD at 1.0650, expecting price action to increase.
- The trader sets a trailing stop-loss order of 25 pips.
- The trailing stop-loss will now start at 1.0625 and always trail price action by 25 pips, moving in the direction of the order.
- The EUR/USD advances to 1.0725.
- The trailing stop-loss moves to 1.0700.
- The EUR/USD reverses and drops below 1.0700, triggering the stop-loss at 1.0700 and locking 50 pips in profits.
Additional Risk Management Measures
Most brokers offer additional risk management tools for trailing stop-loss orders, as different market conditions and strategies require different risk management approaches.
Here are two risk management measures traders should consider:
- Setting a take profit level - They trigger once price action reaches the expected profit level, which can increase overall profitability, where a trailing-stop loss acts as an insurance policy.
- Implementing a hedging strategy involves opening opposing trades on similar assets to minimize risk. However, it is one of the misunderstood risk management tools and is often misused.
Noteworthy:
- Some traders prefer to set a fixed stop loss limit at the maximum acceptable loss defined by a percentage of total equity.
- For example, a trader tolerating a 2% maximum loss will set a stop-loss at that level.
How To Set Up a Trailing Stop-Loss Order
Brokers for trailing stop-loss orders offer trading platforms that support them. The setup may differ, but traders should enable a trailing stop loss and set the preferred trailing stop-loss distance.
Trailing Stop-Loss - Pros & Cons
Before using brokers for trailing stop-loss orders, traders should consider the pros and cons.
The Pros of Trailing Stop-Loss Orders
- Protects against sudden price action swings.
- Works well with take-profit orders.
- Moves automatically once enabled.
- Availability in advanced trading platforms.
The Cons of Trailing Stop-Loss Orders
- Counterproductive if not used in proper market conditions.
- Ineffective if traders fail to optimize the trailing stop-loss distance asset-based.
Bottom Line
Brokers for trailing stop-loss orders offer traders a viable risk management tool, but traders must know how and when to use it effectively. Trailing stop losses can be an excellent trading tool, especially for trend traders and traders seeking to hold positions open for the longer term. They can take a lot of stress out of trading, as correctly predicting optimal exits is virtually impossible to execute consistently.
