A trailing stop is a stop-loss that moves. It follows the price as a trade goes your way, staying a fixed distance behind, so a winner that turns around still closes in profit instead of giving everything back. It only ever moves in your favour, never against you — which is what makes it a tidy way to lock in gains without having to sit and watch the screen.
What it is
A normal stop-loss sits at a fixed price. You set it, and it stays there until the trade closes. A trailing stop starts the same way but then follows the price as the trade moves into profit, keeping a set distance behind it. If the price keeps rising on a buy, the stop rises with it. If the price falls back, the stop stays put. So the trade is never given more room to lose than the distance you chose, and the profit it has already earned is gradually protected.
How it works
You set a trailing distance, usually in pips. The stop is placed that far from the current price, on the losing side. Every time the price makes a new high — for a buy — the stop is dragged up to hold the same distance. It only ever ratchets one way. The moment the price reverses far enough to reach the stop, the trade closes.
A worked example
You buy EUR/USD at 1.1000 with a 20-pip trailing stop, trading £1 per pip.
- The stop starts at 1.0980 — 20 pips below entry. Risk so far: £20.
- Price rises to 1.1050. The stop trails up to 1.1030. You are now locked into at least +30 pips, or £30, even if it reverses from here.
- Price runs on to 1.1090. The stop follows to 1.1070 — a guaranteed +70 pips, £70.
- Price turns and slips back to 1.1070. The stop triggers and you close at +70 pips, £70, without watching a single candle.
Had you set a fixed take-profit at 1.1050 you would have banked £30 and missed the rest. Had you used no stop at all, the reversal could have handed the lot back. The trailing stop kept you in the move, then got you out.
Client-side versus server-side
This is the part that catches people out. A trailing stop set through MetaTrader's own order dialog is client-side: the terminal calculates it and moves it. That means it only works while MetaTrader is open and connected. Close the platform, lose the connection, or have the VPS reboot, and the stop stops trailing — the trade is left with whatever stop was last sent to the broker, or none at all.
A server-side stop-loss lives on the broker's server and holds even when your terminal is off. A true server-side trailing stop is less common; many brokers only trail client-side. If you rely on a trailing stop for protection, know which kind you have, and keep the terminal on a VPS so it does not depend on your home machine staying awake.
How EAs use them
Most expert advisors that trail do it in code, on every tick, which is far more responsive than the platform's built-in option. That is genuinely useful — but it is still client-side. The EA can only move the stop while the terminal is running. If the VPS goes down mid-trade, the trailing logic goes with it, and the position is left on whatever stop was last written to the broker.
Pros and cons
- For — locks in profit automatically, lets winners run, and removes the temptation to close a good trade too early.
- Against — a normal pullback can stop you out just before the move continues; set the distance too tight and you are shaken out constantly.
- The catch — client-side trailing depends entirely on the terminal being up, which is a reason to keep an eye on whether it is.
The Karnek note
A client-side trailing stop only works while the terminal is running, which is exactly the kind of thing worth knowing has failed. Karnek watches the terminal from the live account and tells you the moment it drops offline or an EA stops managing its trades. It is read-only and can never move a stop or place an order itself.
Written and reviewed by the Karnek Research team. Last updated August 2026.
Educational content only - not financial advice. Past performance does not predict future results. Trading carries significant risk.