Trailing stop
A protective order that follows the price in the profitable direction and stays put when the price turns, locking in part of what has been gained.
How to read the number
It converts the exit from a decision into a rule: the level is set in advance and is not revised under the wish to wait a little longer.
When the metric lies
A narrow trail is knocked out by ordinary daily noise; a wide one gives back a large part of the profit. On a price gap the fill is worse than the level: the order sets a trigger condition, not a guaranteed price.
Also known as: ratchet stop