Trailing Stoploss Reversal Level

Written by Miroslav Marinov

Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: September 15, 2025

This indicator trails below or above the price, depending on its position relative to the price. A trader may set the indicator to follow the price based on volatility or on a predefined number of pips.

Trailing stop-loss levels have recently become a popular way to exit trades without emotional involvement. Therefore, the indicator is helpful for controlling risk.

When a long trade is active, the trailing stop-loss level indicator sits below the price and ratchets higher as the price rises. When a short trade is active, the trailing stop-loss level indicator sits above the price and ratchets lower as the price falls.

If the price returns to the trailing stop-loss level, the latter will remain at its previous level and will never move away from the price. In this way, potential gains are preserved while losses are limited.

A long position should be closed when the price moves back below the trailing stop-loss level. A short position should be closed when the price moves back above the trailing stop-loss level.

Chart source: VT Trader