Online forex brokers offer various types of orders designed to protect investors from significant losses. In theory trailing stops provide a way for traders to limit losses and to lock in profits on individual trades. The basic idea of the trailing stop is that as a trade moves into profit, the stop level adjusts upwards in the case of a long (buy) trade or downwards in the case of a short trade.

Online brokers offer various types of orders designed to protect investors from significant losses. Many traders have heard of the truism, 'cut your losses short, and let your profits run. However, if you are unfamiliar with a tool to help you implement this tried and true wisdom, it's time to familiarize yourself with the Trailing Stop.