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Trailing Stop is a type of order used in stock markets, cryptocurrency markets, and other markets.
A trailing stop order is used to hold assets when their price moves in a favorable direction for the investor, and to minimize losses when price moves unfavorably.
Essentially, a stop price (a price at which a certain loss is tolerated) is set, and as the asset price moves in a favorable direction, the stop price automatically rises (trailed).
Conversely, if the price moves unfavorably and reaches the set stop price, the asset is automatically sold.
Trailing stop orders are used by investors to secure profits while minimizing losses, and are particularly useful in situations with anticipated rapid price fluctuations.