Trailing Percentage Price
You can create a conditional order where the trigger price is based on a specific percentage movement in the share price to the previous day’s open/high/low/close price. The percentage specified must be numerical, positive and be a whole percentage number.
This trigger price is calculated, then used as a reference point to monitor trade events in the market. Action will be triggered when the stock moves above or below your calculated trigger price.
Trailing Stop Loss orders are particularly helpful for you to capture the upside in your investment but be protected from any sharp downturn in price.
| Conditional order type | When the share price rises | When the share price falls |
| Profit trigger | The trigger price remains the same | The trigger price is adjusted |
| Stop loss | The trigger price is adjusted |
The trigger price remains the same |
Example: Trailing Stop Loss
Our trailing stop loss type conditional order follows a stock share price as it moves upwards, and will result in a Sell order being placed to market when the price falls and reaches the calculated trigger price.
Our trailing stop loss type conditional order is set as a trailing percentage of the previous day’s yesterday’s high/low/open/close. The trigger price is recalculated daily and will follow the share price only if it moves up. If the share price falls, the trigger price will be retained.
1. You set a trailing stop loss type conditional order to Sell 1000 AAA shares if the price falls by ‘less than or equal’ to 5% below the previous day’s close. When you enter the order, previous day’s close price is $10.00 so your trailing stop trigger price is $9.50 (i.e. 5% below the previous day’s close price of $10.00).
2. As the AAA share price keeps moving up, your trigger price adjusts accordingly. The stock’s closing price peaks at $15.00 and the calculated trigger price is adjusted to $14.25 (5% below $15.00).
3. The AAA stock then begins to fall and closes the day at $14.50. As this price is lower than the previous day’s closing price of $15.00, your calculated trailing stop trigger price is retained and remains at $14.25.
4. The next day, AAA share price continues to fall and reaches $13.00. As the stock price has now crossed the trigger price of $14.25, your Sell conditional order is triggered and placed into market.
Where you specify a limit price, your triggered sell order will sell at this limit price or higher.
For example, the conditions for your trailing stop loss order are met (with the calculated trigger price at $14.25) but you have set a limit price of $14.30. As your trigger price of $14.25 is below your limit price of $14.30, your Sell order will be placed at $14.30.