Can a Trailing Stop-Loss Be Used to Enter a Short Position?
Yes, a trailing stop-loss can be used to manage a short position. In this case, the stop price trails the asset's price downwards.
The stop is set at a percentage or fixed amount above the market price. If the price falls, the stop price also falls, locking in profit.
If the price rises, the stop price remains fixed, protecting the position from a reversal.
Glossar
Trailing Stop
Order ⎊ A trailing stop is a dynamic risk management tool that automatically adjusts a stop-loss order as the asset price moves favorably.
Stop Price
Trigger ⎊ A stop price, within cryptocurrency derivatives and options trading, functions as a conditional order execution point, initiating a market or limit order when the specified price level is reached.