The distance the TSL follows the price can be specified as a percentage, so if the current price of ETH was $100 and you had a TSL of -10%, auto binary signals your TSL would start at $90 and follow the price with a maximum deviation of 10%.

When should I use a Trailing Stop Loss?

Now you might be thinking: that's amazing! Why not use it all the time? But luckily, I'm here to tell you why that would be a bad idea.

TSL is a tactical tool, it's more than just a special security measure you can use whenever you think you're being smart.

If used incorrectly, TSL would most likely cause you to lose money.

The standard trading approach if you are long is to move the Stop Loss up only after there is a pullback and the price is rising again.

The Stop Loss is moved to just below the lowest swing of the retracement. See Figure 1 for an example.

Unfortunately, if a pullback were to occur, an active TSL would most likely be triggered, causing you to exit the trade just before the coin goes up again.

The real potential for Trailing Stop Loss (TSL) lies in its ability to take advantage of a rallying coin, allowing you to take as much profit as possible without actually calling the top.

Let's look at an example, consider Bitcoin (BTCUSDT) May 13, 11:00 AM:

Imagine that after spotting a potential inverse head and shoulders, you see that BTCUSDT has tested its 7115.23 resistance and is ready for a breakout. You keep your eyes on the peel and wait for your opportunity to enter the position.

Volume Jumps and BTCUSDT Breaks Its Resistance! You will buy around 7115-7120 with a TSL percentage deviation of 4%.