A trailing stop is a type of order designed to lock in profits or limit losses when a trade moves favorably.
Trailing stops are only moved if the price moves favorably. Once it moves to take profit or cut a loss, it does not move back in the other direction.
A trailing stop is a stop order that can be a limit or market order.
One of the most important considerations for a trailing stop order is whether it will be a percentage or a fixed dollar amount and how far it will lag the price.