A trailing stop-loss order is an advanced stop-loss order set at a specified percentage or amount away from the crypto’s current market price. The difference between the stop-loss price and market price always remains constant. In other words, the stop-loss order proportionally moves with the current market price.
A stop-loss order is a smart technique to lock in profits as the market progresses in the trader’s desired direction while keeping the risks low.
For instance, let’s say a trader has placed 10% trailing stop-loss on a long position on BTC/USD at $10,000. The initial stop-loss will be at $9,000. If the pair falls down from the entry price, the order will be executed if the market price touches $9,000. If the market jumps to $12,000, then stop-loss will also increase to $10,800. From this point, if the price drops to $10,800, the position will be closed with a profit of 8%.