A trailing stoploss is a stoploss order which keeps on moving up (in case of an upmove) or down (in case of a downmove) behind the stock price like a trailing pet which keeps on following his master.
All you have to do is set the percentage by which it should stay behind his master (price).
When to put Trailing Stop Loss?
When the stock has achieved your target, it wise to give it opportunity to move some more.
In such a case, trailing stop loss is advisable.
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When NOT to put Trailing Stop Loss?
When the stock has not achieved your target, it may correct several times on its way up.
This correction is perfectly normal and healthy.
Without correction the stability or sustainability of an increase in price is fragile!
Also, at times, this intermediate correction may be small.
In such a case, a trailing stop loss can get wrongly triggered when the stock was to undergo only a minor correction followed by the continuation of the sharp up-move.
This way you can miss the sharp upmove with a trailing stop loss.
So, in such cases, don't put trailing stop loss and opt for a normal stop loss.
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