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A trailing cease order is a kind of cease order that strikes with the worth of a safety. It’s designed to guard income or restrict losses by routinely promoting a safety when it reaches a specified proportion beneath the present market worth. The very best proportion for a trailing cease order will range relying on the person investor’s danger tolerance and buying and selling technique.

Trailing cease orders will be an efficient method to handle danger and defend income. They can assist to make sure that buyers don’t promote a safety too early or maintain on to it for too lengthy. Nonetheless, you will need to keep in mind that trailing cease orders are usually not a assure towards losses. They will nonetheless be triggered even when the worth of a safety doesn’t decline considerably.

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