Trailing stop

Specify the adjustment rule

Define the price side, distance, activation threshold, update frequency and adjustment increment. A fixed pip distance, an ATR multiple and a confirmed-swing trail are different rules. If ATR increases, simply recalculating the distance could loosen the stop: a never-loosen variant retains the previous level or adopts a more favourable new one. For a short position the direction reverses, and the closing price is normally the Ask.

Where the mechanism runs

MetaTrader 5’s standard trailing-stop feature makes subsequent adjustments in the terminal. Closing it prevents new updates, although the last successfully placed SL remains on the server. Do not apply this assumption to every application: another provider may use a server-side mechanism. Check platform units, because points are not always pips, as well as modification acknowledgements and minimum-distance restrictions.

The benefit and cost of earlier exits

A trail makes the exit procedure explicit, but guarantees neither a profit nor an execution price. A tight stop can close a trade during an ordinary pullback; a wider one permits more unrealised profit to be surrendered. Evaluate the complete sample, comparing outcomes, drawdown and costs with another exit variant. Changing the distance during one trade to avoid a loss changes the rules; it does not demonstrate an improved strategy.

Further learning and sources

9.7 Managing an open position: break even, the trailing exit and scaling; 11.5 Trading automation: EAs, MQL scripts, cBots and VPS.

Primary sources (checked 2026-10-11): MetaTrader 5 Help — Basic Principles.

Diagram and worked example