📊 Practical Explanation of Using a Trailing Stop in Trading

Practical Example:

1. Buying a Coin for $100

Suppose you bought a digital currency for $100.

2. Determining the Trailing Stop Distance

You decide to use a trailing stop with a distance of $5, meaning the stop order will only move $5 away from the highest price the stock reached.

3. The price rises to $110

As the price rises from $100 to $110, the trailing stop order automatically moves and is set at $105 ($110 - $5).

4. The price falls to $105

If the price starts to decline from $110 and reaches $105, the trailing stop order is executed, the trade is automatically closed, and you have made a profit of at least $5.

5. If the price continues to rise to $120, the order will move with the price to $115 ($120 - $5), ensuring you protect a larger profit.

6. If the price subsequently drops below $115 for any reason, the trade will automatically close at $115, meaning you ve closed the trade and taken your protected profit.

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Key Points to Use:

The Trailing Stop distance should be proportional to the currency s volatility. It shouldn t be too narrow to prevent the trade from being broken up by minor fluctuations, and it shouldn t be too wide to protect your profit.

This tool reduces stress because you don t need to constantly monitor the market.

It helps you manage risk intelligently and prevent major losses.

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🔍 This is an educational explanation only, not an investment recommendation. The market is risky, so be aware.#NFPWatch #BTCReclaims110K #TrumpVsMusk #REX-OSPREYSolanaETF #NODEBinanceTGE