CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 51% and 89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
What is a trailing stop order in forex trading?
A trailing stop order is a type of stop-loss that moves with the price when the market is trending in your favor. Unlike a fixed stop-loss, which stays in one place, a trailing stop adjusts dynamically, locking in gains as the price rises or falls in your direction.
For example, imagine you buy EUR/USD at 1.1000 and set a trailing stop 20 pips below. If the price rises to 1.1050, the trailing stop will shift to 1.1030, securing 30 pips of profit. However, if the price reverses and hits 1.1030, your position closes automatically.
Trailing stops help traders capture profits without having to manually adjust their stop-loss levels, which is especially helpful during sudden market moves or when trading news events.
stop_circleMore than one kind of stop
Want to strengthen your trading strategy with reliable risk management? A Guaranteed Stop Loss Order (GSLO) is a powerful tool designed to protect your trades. Unlike standard stop-loss orders, which may slip during volatile market movements, a GSLO guarantees your position closes exactly at your set price, regardless of market conditions. Explore our detailed guide on the best forex brokers with guaranteed stop loss orders to find the ideal platform for your trading needs!
How do trailing stop orders work?
Trailing stops operate by following the price at a set distance — either in pips, percentages, or fixed values. Once the price moves in your favor, the stop-loss level adjusts accordingly. However, it never moves backward.
One use-case in forex trading would be by using trailing stops during the Nonfarm Payroll Report, where price spikes can be unpredictable. The trailing stop helps lock in gains quickly if the trend continues upward, but it also protects you from sudden reversals without requiring constant monitoring.
summarizeWhat is the Nonfarm Payroll (NFP) Report?
The Nonfarm Payroll (NFP) report measures monthly job growth in the U.S., excluding farm workers and a few other sectors. It's a key indicator of economic health and often moves forex markets, especially USD pairs. Traders watch it closely for insights into inflation, interest rates, and Federal Reserve policy shifts.
Most brokers offer trailing stops as part of their trading platforms, but the implementation varies. Some brokers use server-side execution, meaning the order adjusts automatically even if your trading platform is offline. Others require your trading platform to remain open for the stop to function properly, which can be risky during power outages or disconnections.
Why are trailing stop orders useful in forex trading?
Trailing stop orders are incredibly useful for both risk management and profit protection. They take emotions out of the equation, ensuring trades are executed based on predefined criteria rather than gut feelings.
Traders often rely on trailing stops when trading trending pairs like GBP/JPY. These pairs are volatile, and trailing stops let you ride trends without constantly worrying about manual adjustments. The dynamic nature of the stop-loss also reduces the risk of exiting too early or too late.
For traders who can’t watch the markets 24/7, trailing stops act as automated safeguards. Whether you’re sleeping or away from the screen, your trades are protected.
Can trailing stop orders be automated?
Yes, most brokers allow trailing stop orders to be automated, and this is where the real power lies. Many platforms, like MetaTrader 4 and MT5, integrate Expert Advisors (EAs) to manage trailing stops without manual intervention.
In our experience, automation is particularly effective for strategies like scalping and swing trading. With EAs, you can customize the trailing stop behavior, such as setting incremental adjustments or defining thresholds for tighter stops during specific timeframes.
Some brokers even provide proprietary platforms with built-in automation features, eliminating the need for external programming. However, make sure to test these features on a demo account first. Not all automation tools are created equal, and bugs can sometimes lead to execution delays.
Do all forex brokers support trailing stop orders?
Not all forex brokers support trailing stop orders, and even those that do may impose restrictions. Some brokers only allow trailing stops on specific account types, while others might limit them to certain trading platforms.
For instance, we’ve encountered brokers that offer trailing stops on MetaTrader 4 but not on their proprietary web platforms. This inconsistency can be frustrating, especially if you prefer mobile trading.
Before committing to a broker, verify whether trailing stops work server-side or require your trading terminal to stay online. Server-side execution is generally more reliable since it doesn’t depend on your internet connection.
Are there fees associated with using trailing stop orders?
In most cases, brokers do not charge additional fees for using trailing stop orders. However, hidden costs can arise in the form of wider spreads or slippage during fast-moving markets.
We’ve noticed that some brokers widen their spreads during news releases, which can trigger trailing stops prematurely. This is why we always recommend testing brokers on a demo account first to see how their spreads behave under pressure.
gps_fixedAvoid spread worries by fixing them
Prefer predictable trading costs? Fixed spreads can help you avoid surprises during volatile market conditions. Check out our guide to the best forex brokers for fixed spreads to find platforms that offer stability when it matters most.
If your broker charges commissions instead of spreads, make sure to factor those costs into your trading plan. Even minor fees can add up, especially for frequent traders using trailing stops as part of short-term strategies.
BrokerNotes.co 2024 Overall Rankings
To recap, here are our top forex brokers for 2024, sorted by Overall ranking.
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Methodology
At BrokerNotes.co, our data-driven online broker reviews are based on our extensive testing of brokers, platforms, products, technologies, and third-party trading tools. Our product testing extends to the quality and availability of educational content, market research resources, and the accessibility and capabilities of mobile platforms and trading apps. We also dive into each broker’s trading costs, such as VIP rebates, inactivity fees, custody fees, bid/ask spreads, and other fee-based data points.
Steven Hatzakis, an industry veteran with decades of experience in the forex market, leads the BrokerNotes research team. All BrokerNotes content is researched, fact-checked, and edited by the research team.
All websites and web-based platforms are tested using the latest version of the Google Chrome browser. Our Desktop PCs run Windows 11, and we use MacBook Pro laptops running the latest version of macOS to test trading on the go. We test mobile apps and products using iPhones running iOS 17 and Samsung devices running Android OS 14.
Note: The online brokers on our site provide the ability to trade forex in one or more ways, such as non-deliverable spot forex (i.e., rolling spot contracts), contracts for difference (CFD), or other derivatives such as futures. The availability of specific markets or features will depend on your country of residence and the broker's applicable brand or entity that services your account(s).
Forex Risk Disclaimer
There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Learn more about foreign exchange risk.
About the Editorial Team
BrokerNotes.co provides unbiased forex broker reviews and ratings to help traders and investors find the best broker for their needs. All content is researched, fact-checked, and edited by our research team and all ratings and rankings are based on the team’s in-depth product testing.
Joey Shadeck is the Content Strategist and Research Analyst for BrokerNotes.co and ForexBrokers.com. He holds dual degrees in Finance and Marketing from Oakland University, and has been an active trader and investor for close to ten years. An industry veteran, Joey obtains and verifies data, conducts research, and analyzes and validates our content.
Jeff Anberg is a Staff Editor at BrokerNotes.co and ForexBrokers.com. Along with years of experience in media distribution at a global newsroom, Jeff has a versatile knowledge base encompassing the technology and financial markets. He is a long-time active investor and engages in research on emerging markets like cryptocurrency. Jeff holds a Bachelor’s Degree in English Literature with a minor in Philosophy from San Francisco State University.
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