Your broker will not let you set a trailing stop (sell) for less than the current price. But theoretically, if it did work, you would end up selling your stock at the current market value.

You keep raising your stop loss when prices of stock rises to lock your profit and continue riding upward movement.

Hi Guys!

Just looking for some help on a common concept, the question I have goes a little beyond the common example.

Common Example:

Stock Price: 10.00

Trailing Stop: 9.85 (-.15)

Then stock goes to 10.20

Trailing Stop goes to 10.05

Stock goes to 10.10

Trailing stop stays at 10.05

Now this is the most common example of how a trailing stop works, but of course, the stock market is a little more complicated than "Stock Price = $10".

Complicated Example

Bid: 9.80

Ask: 10.00

Buying the asset at 10$ and the trailing stop at 9.85 is obviously silly.... Just wondering what to do in this situation.