How to Set Trailing Stop Loss in TradingView: A Step-by-Step Guide

Ever watched a winning trade turn into a loser right before your eyes? Yeah, me too. That sinking feeling when you see profits evaporate faster than water in the desert is something every trader knows way too well.

The good news? Trailing stop losses in TradingView can be your safety net. I'm going to walk you through exactly how to set them up, because honestly, this is one of those features that separates traders who sleep well at night from those who wake up checking their phones at 3 AM.

What exactly is a trailing stop loss?

Picture this: you're in a trade that's going your way, making money hand over fist. But you know the market can flip faster than a pancake on Sunday morning. A trailing stop loss is like having a smart bodyguard for your trade – it follows the price around, always keeping a safe distance, ready to get you out if things go sideways.

Here's how it works in plain English:

• For long positions: The stop trails below the current price as it rises
• For short positions: The stop trails above the current price as it falls
• The magic part: It only moves in your favor, locking in profits along the way

Think of it as a ratchet system – once your stop moves up (or down for shorts), it never goes back. This means you're constantly protecting more and more of your gains as the trade develops.

Why trailing stops will change your trading game

I used to be one of those traders glued to the screen, finger hovering over the exit button, trying to time the perfect exit. Spoiler alert: it was exhausting and I wasn't very good at it.

Trailing stops solve several problems at once:

Peace of mind: You can actually step away from your computer without fear of losing everything. Revolutionary, right?

Profit protection: As your trade moves in your favor, your stop moves with it, locking in gains automatically.

Removes emotion: No more second-guessing yourself or holding onto losers hoping they'll turn around.

Better sleep: Seriously, you'll sleep better knowing your profits are protected even when you're not watching.

The best part? You can calculate your risk-reward ratio upfront and let the trailing stop do the heavy lifting.

Setting up your trailing stop in TradingView: The step-by-step process

Step 1: Open your trading panel

First things first – you need to get to where the action happens. Look for the trading panel on the bottom of your TradingView interface. If you don't see it, click on the "Trading Panel" button or press Alt+T to bring it up.

Step 2: Find the trailing stop option

Here's where it gets interesting:

1. In your order panel, look for the "Stop Loss" dropdown menu
2. Click on it and you'll see different options including "Trailing Stop"
3. Select "Trailing Stop" from the dropdown

Important note: If you're using certain brokers like OANDA, make sure you have a V20 account. Some older account types don't support trailing stops, which is a real bummer.

Step 3: Configure your trailing distance

This is where you need to put on your thinking cap. The trailing distance determines how far behind (or ahead for shorts) your stop will follow the price. You've got several options:

Pips: Perfect for forex trading where you want precise control Points/Ticks: Great for futures and some stock indices Percentage: My personal favorite for stocks and crypto because it scales with the price Dollar amount: Good for when you want to risk a specific dollar amount

For example, if you set a 2% trailing stop on a $100 stock, your stop will always stay $2 below the highest price the stock reaches after you enter the trade.

Step 4: Set it and (mostly) forget it

Once you've configured everything, place your order and let the system work. I know it's tempting to fiddle with it, but resist the urge. The whole point is to remove your emotions from the equation.

Advanced trailing stop strategies with Pine Script

Want to get really fancy? You can create custom trailing stop logic using Pine Script. This is where things get interesting because you can program your own rules based on:

• Volatility (using ATR stop loss techniques)
• Multiple timeframe analysis
• Custom indicators
• Market conditions

If you're new to Pine Script, don't worry – there are comprehensive guides to get you started with building your own automated trading strategies.

For those who prefer a no-code approach, tools can help you create sophisticated trailing stop strategies without writing a single line of code.

Common trailing stop mistakes (and how to avoid them)

After years of trading and plenty of expensive lessons, here are the mistakes I see people make over and over:

Setting the trail too tight

This is the big one. Set your trailing distance too small and you'll get stopped out by normal market noise. I learned this the hard way when I kept getting stopped out of perfectly good trades by tiny pullbacks.

Solution: Use the Average True Range (ATR) to gauge normal volatility and set your trail accordingly. A good rule of thumb is 1.5-2x the ATR for most markets.

Ignoring market personality

A crypto market that can swing 10% in an hour needs a different approach than a sleepy dividend stock. What works for Bitcoin probably won't work for Coca-Cola.

Solution: Adjust your trailing distance based on the asset's typical volatility patterns.

Forgetting about slippage

In fast-moving markets, your stop might not get filled exactly where you expect. Gap openings and news events can cause your actual exit to be worse than your stop price.

Solution: Build in a small buffer for slippage, especially in volatile markets or during news events.

Not considering time of day

Market volatility changes throughout the trading session. The first and last hours typically see more movement than the middle of the day.

Solution: Consider wider trails during high-volatility periods and tighter trails during quiet times.

Trailing stops for different markets

Forex trading

For forex, I typically use pip-based trailing stops. Start with 20-30 pips for major pairs during normal market conditions. During news events or volatile sessions, consider widening to 40-50 pips.

Stock trading

Percentage-based trailing stops work well here. For stable large-cap stocks, 3-5% is often sufficient. For volatile small-caps or growth stocks, you might need 8-12% to avoid getting whipsawed.

Cryptocurrency

Crypto needs the most breathing room due to its notorious volatility. Start with 7-10% trailing stops and adjust based on the specific coin's behavior. Bitcoin might need less room than an altcoin that regularly swings 20% in a day.

When NOT to use trailing stops

Trailing stops aren't perfect for every situation:

• Range-bound markets: In sideways markets, trailing stops can get you stopped out unnecessarily
• Very short-term trades: For scalping or very quick trades, the lag in stop movement might not be helpful
• Low-volume assets: In illiquid markets, stops might not get filled at reasonable prices

Wrapping up: Making trailing stops work for you

Trailing stops are one of those tools that seem simple on the surface but can dramatically improve your trading when used correctly. They're not magic bullets – no trading tool is – but they're incredibly useful for protecting profits and reducing the emotional burden of trade management.

Start conservative with your settings. It's better to get stopped out of a few good trades early on while you're learning than to hold onto losers hoping they'll turn around. As you get more comfortable, you can fine-tune your approach based on your trading style and the markets you focus on.

Remember, the goal isn't to nail the exact top or bottom – it's to capture a good chunk of the move while protecting yourself from major reversals. Building effective stop loss strategies is a skill that develops over time, so be patient with yourself as you learn.

And here's the thing – even experienced traders are constantly tweaking their approach. Markets evolve, volatility changes, and what worked last year might not work this year. Stay flexible, keep learning, and don't be afraid to adjust your trailing stop strategy as you gain more experience.

Your future self will thank you for taking the time to master this essential risk management tool. Trust me on that one.