Educational content. This article explains what a trailing stop is and how it works in MetaTrader 5. It does not constitute investment advice or a trading recommendation. CFD trading carries significant risk of loss and may not be suitable for all investors.
A trailing stop is one of the few order tools that changes by itself after it is set, and that is exactly what makes it easy to misunderstand. Traders set one, close the platform for the night, and assume it keeps following the price. In MetaTrader 5, by default, it does not: the trailing logic lives in the terminal on the trader's computer, and when the terminal is off, the stop freezes where it was.
This article defines the trailing stop, explains how MT5 moves it, works through a numerical example on gold, sets out what happens when the terminal closes and when the price gaps, and describes the trade-off that the choice of trailing distance represents. How ordinary pending orders and stop losses are held on the server is covered in buy limit vs buy stop.
What Is a Trailing Stop?
A trailing stop is a stop loss that automatically moves in the direction of a profitable position, keeping a set distance behind the current price, and that stays in place when the price moves back.
On a long position the stop moves up as the price rises; on a short position it moves down as the price falls. The distance is fixed by the trader, so the stop is always that far from the best price reached since the trail began. When the price reverses, the stop does not follow it back. If the reversal is large enough to reach the stop, the position is closed. The trailing stop therefore turns an open-ended position into one with a protective level that ratchets in one direction only.
How a Trailing Stop Works in MT5
In MT5 a trailing stop is attached to an open position with a distance in points, begins moving once the position's profit exceeds that distance, and then sets the stop loss at that distance behind the price on each qualifying tick.
The steps are:
- A position is open. The trader right-clicks it in the Trade tab and chooses a trailing stop distance from the list of preset levels, or a custom value, in points.
- While the position's profit in points is smaller than the trailing distance, nothing happens.
- Once the profit exceeds the distance, the terminal sends an instruction to place the stop loss at the trailing distance from the current price.
- Each time the price makes a new favourable extreme, the terminal moves the stop loss again, keeping the same distance.
- When the price retreats, the stop loss stays at its last level. If the price reaches it, the position is closed by the server as an ordinary stop loss.
Two limits from the MT5 documentation shape how responsive the trail is. A trailing stop is processed no more than once every 10 seconds for any one position, and when several positions on the same symbol carry trailing stops, only one of them is processed per incoming tick, starting with the most recently opened. In a fast market the stop can therefore lag the price by more than the set distance for a few seconds.
Points, Not Pips
MT5 expresses the trailing distance in points, the smallest price increment of the instrument, and a point is not the same as a pip on most quotes.
On a five-digit forex quote such as EUR/USD, one pip is ten points, so a 150-point trail is 15 pips. On gold quoted to two decimals, one point is USD 0.01 per ounce, so a 500-point trail is USD 5.00. The same number of points therefore means very different distances on different instruments. The relationship is explained in what is a pip.
A Worked Example on Gold
A 500-point trailing stop on a long gold position moves the stop loss up USD 5.00 behind each new high once the trade is USD 5.00 in profit, and closes the position when the price falls back USD 5.00 from its highest point.
Gold at Vanto is quoted per ounce to two decimals, with a contract size of 100 ounces per lot. The example uses 0.10 lots, which is 10 ounces, so every USD 1.00 move in the price is USD 10 of profit or loss.
| Step | Gold price (Bid) | Stop loss | Unrealised result on 0.10 lots |
|---|---|---|---|
| Position opened at 4,300.00 | 4,300.00 | None (trail inactive) | USD 0 |
| Price rises | 4,304.00 | None (profit below 500 points) | +USD 40 |
| Profit reaches the distance | 4,305.00 | 4,300.00 | +USD 50 |
| New high | 4,320.00 | 4,315.00 | +USD 200 |
| Price falls back | 4,317.00 | 4,315.00 (unchanged) | +USD 170 |
| Price reaches the stop | 4,315.00 | Closed | +USD 150 |
Illustrative figures. Contract size from Vanto calculator data, snapshot 2026-09-13; spread and swap not included.
At the moment the trail became active, the stop loss was at the entry price, so the position could no longer close at a loss from a price move alone, although spread, swap and slippage still apply. From there, every new high raised the level at which the position would close. The final result depended on the highest price reached and the distance, not on the price at which the trader happened to look.
What Happens When the MT5 Terminal Is Closed
When the MT5 terminal is closed, disconnected or the computer is switched off, the trailing stop stops moving, but the stop loss level it has already set remains on the server and still protects the position.
This is the single most important fact about the MT5 trailing stop, and the MetaTrader 5 Help states it directly: the trailing stop is executed in the client terminal, not on the server as stop loss and take profit are, so it does not work while the terminal is off. The consequences are specific:
- The last stop loss level survives. Every time the terminal moved the stop, it sent a modification to the server. The most recent level is a normal stop loss held on the server and triggers whether or not the terminal is running.
- Further trailing is lost. If the price keeps moving favourably overnight, the stop does not follow. The position gives back more of the move, if the price reverses, than the trailing distance would have allowed.
- The trail is tied to one terminal. A trailing stop set on one computer is not managed by the mobile app or by another installation logged into the same account.
- A trail that had not started protects nothing. If the position never reached the trailing distance in profit before the terminal closed, no stop loss was placed by the trail. Only a separately set stop loss is on the server.
Some brokers run a server-side trailing function, and some traders keep the terminal running around the clock on a virtual private server so that the trail continues. Vanto's Forex VPS page describes hosting of that kind through a partner. Neither changes the default MT5 behaviour described above, and a trailing stop implemented in an Expert Advisor depends on the terminal in exactly the same way.
Trailing Stops and Price Gaps
A trailing stop closes a position through an ordinary stop loss, so when the price gaps past the level it is filled at the next available price, which can be worse than the stop shown.
The trail does not create a guaranteed exit. If gold closes on Friday with a trailing stop at 4,315.00 and opens on Monday at 4,302.00, the stop is triggered at the opening price, not at 4,315.00, and the difference is slippage. The same happens around high-impact data and central bank decisions. The general mechanics are in what is slippage in trading, and the reason a stop loss behaves like a stop order in a gap is set out in buy limit vs buy stop.
Tight vs Wide Trailing Distances
A tight trailing distance keeps more of a move when a trend reverses sharply but closes positions more often on ordinary fluctuations, while a wide distance tolerates normal fluctuations but gives back more before it closes.
There is no distance that removes this trade-off; the choice places the stop somewhere on it.
| Distance relative to the instrument's usual fluctuation | What tends to happen |
|---|---|
| Smaller than normal intraday moves | Frequent closures on routine noise; small give-back when a close occurs |
| Similar to normal intraday moves | Some closures on noise; moderate give-back |
| Larger than normal intraday moves | Positions survive routine noise; larger give-back when a reversal reaches the stop |
Two instrument-specific facts sit underneath the table. The spread counts against the distance, because on a long position the stop is triggered by the Bid, so a distance smaller than a few spreads is quickly consumed at wider-spread hours. And volatility differs by instrument by orders of magnitude, which is why a fixed number of points is not comparable between, for example, a major currency pair and gold. Some traders describe the distance in terms of a volatility measure such as the Average True Range for that reason; that is a description of practice, not a recommendation of a setting.
Trailing Stop vs Fixed Stop Loss
A fixed stop loss stays at the level the trader set until the trader changes it, while a trailing stop moves that level automatically in the position's favour.
| Feature | Fixed stop loss | MT5 trailing stop |
|---|---|---|
| Moves automatically | No | Yes, in the profitable direction only |
| Where it is processed | Trade server | Client terminal (the resulting stop loss is on the server) |
| Works with terminal closed | Yes | Stop stays at last level; no further trailing |
| Active from the moment it is set | Yes | Only once profit exceeds the trailing distance |
| Fill in a gap | Next available price | Next available price |
The two are often combined: a fixed stop loss protects the position from the start, and the trailing stop takes over once the trade has moved far enough to overtake it.
Frequently Asked Questions
What is a trailing stop in simple terms?
A trailing stop is a stop loss that follows the price when a trade moves in your favour, staying a fixed distance behind it, and stays where it is when the price turns back.
Does a trailing stop work when MT5 is closed?
Not by default. MT5 runs the trailing stop inside the terminal, so it stops moving when the terminal is closed. The stop loss level it had already set remains on the server and still closes the position if reached.
When does a trailing stop start moving?
In MT5 the trailing stop starts moving once the position is in profit by more than the trailing distance. Until then no stop loss is placed by the trail.
Can a trailing stop close a trade at a loss?
Yes. A trailing stop set before the trail has moved the stop to break-even does not protect the entry price, and in a gap any stop loss can be filled beyond its level. Spread and swap also affect the final result.
What is the difference between a trailing stop and a stop loss?
A stop loss stays at a fixed level until changed; a trailing stop moves that level automatically as the price moves in the position's favour. In MT5 the stop loss is managed on the server and the trailing is managed by the terminal.
How many points is a pip in a trailing stop?
On five-digit forex quotes one pip equals ten points, so a 200-point trailing stop is 20 pips. On instruments quoted to two decimals, such as gold, one point is 0.01 of the price.
Use Trailing Stops on Vanto
Trailing stops can be attached to any open position in the Vanto MetaTrader 5 desktop platform. The point size and contract size for every instrument are in the MT5 symbol specification and in the trading calculator, which also shows the swap charged for holding a position overnight. How margin and free margin respond while a trade is open is explained in what is margin in trading. A demo account shows how a trailing stop moves on live prices without risking capital.
Risk warning. Trading securities, futures, options, and contracts for differences are complex financial instruments that require knowledge and understanding. Prices can fluctuate significantly and securities may become valueless. Investors may incur losses exceeding the potential for profits. Trading on margin can result in losses greater than the amount initially deposited. Past performance is not necessarily a guide to future performance. The information in this article is for educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instrument. Consider whether CFD trading is appropriate for your circumstances and seek independent advice if necessary.