A trailing stop is a modification of a typical stop loss order that can be set at a defined percentage or pip amount, for example 15 pips. It is designed to lock in profits or limit losses as a trade moves favorably. A trailing stop is typically placed at the same time the initial trade is placed. For example, if we set the trailing stop at 15 pips, it trails the initial stop-loss 15 pips favorably as soon as our trade is 15 pips in profit. The use of a trailing stop reduces a loss when a trade moves favorably and we are not able to monitor and control our trade manually.