# Trailing Stop Order

A **Trailing Stop Order** is a type of stop order that automatically adjusts with the market when the price moves in your favor. It helps you lock in gains without having to manually update your stop.

Instead of setting a fixed stop price, you set a **callback rate** — a percentage that tells the system how far the market must reverse before your order is triggered.

When the price moves in your favor, the stop price follows it. If the price reverses by the callback rate, a **market order** is triggered to close your position.

### How it works

* **Callback rate**: The percentage used to trail the current market price.
  * Example: A 2% callback rate means the stop price stays 2% behind the highest (or lowest) price reached after the order is placed.
* **For long positions**:
  * The stop price moves up as the market rises.
  * If the price falls by the callback rate, a **market sell** is triggered.
* **For short positions**:
  * The stop price moves down as the market falls.
  * If the price rises by the callback rate, a **market buy** is triggered.

#### Example 1 (long position on BTC)

* **Entry price**: $95,000
* **Callback rate**: 2%

If BTC rises to **$100,000**, the trailing stop price moves up to **$98,000** (2% below the peak).

If the price then falls to **$98,000**, your stop triggers a **market sell**, closing the position and locking in profit.

#### Example 2 (short position on BTC)

* **Entry price**: $105,000
* **Callback rate**: 2%

If BTC falls to **$100,000**, the trailing stop moves down with it, staying 2% above — now at **$102,000**.

If the price then rebounds to **$102,000**, your stop triggers a **market buy**, closing the short position to secure profit before the price climbs further.

### When to use it

* To automatically **protect profits** when the market moves in your favor
* To **let your trade run** while still having a dynamic exit
* As a smarter alternative to fixed stop-losses


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