Trailing Stop (Perfect Technique)
A technique often used in attempt to protect profits without limiting potential gains by moving a stop up or down with the market. A stop order would be raised on a long position in a bullish market, and lowered on a short position in a bear market. For example, a trader initiates a long futures position when the market is at $4, and places a protective stop at $3. The market then rallies to $10. He or she then moves the stop up to $9, exiting the position if the market falls to $9.
Cited from: Trading Terms
