A Trailing Percentage Price enables you to place a conditional order where the trigger price is calculated based on a specified percentage movement in a share’s price relative to the previous trading day’s open, high, low, or close price.
The percentage you nominate must be:
- Numerical
- Positive
- A whole number (for example, 5% or 10%)
Once your selected percentage and reference price are applied, the system calculates a trigger price, which is then used as a reference point to continuously monitor market activity.
Your conditional order will be triggered when the share price moves above or below the calculated trigger price, depending on the condition you have selected.
Why Use a Trailing Stop Loss?
Trailing stop loss orders are particularly useful for investors who wish to:
- Participate in upward price movements, while
- Remaining protected against sudden or significant declines in share price
This order type allows the trigger price to move in line with favourable price changes, while helping to lock in gains should the market reverse.
| 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
A trailing stop loss conditional order follows a share price as it rises and automatically places a Sell order into the market when the price falls and reaches the calculated trigger level.
The trailing stop is set as a percentage movement from the previous day’s open, high, low, or close price. The trigger price is:
- Recalculated daily when the share price moves upwards, and
- Retained (unchanged) if the share price declines
Step‑by‑Step Illustration
- You place a trailing stop loss conditional order to Sell 1,000 shares of AAA if the price falls “less than or equal to” 5% below the previous day’s close.
- At the time of placing the order, the previous day’s closing price is $10.00.
- Your initial trailing stop trigger price is therefore $9.50 (5% below $10.00).
- As the price of AAA continues to rise, the trigger price adjusts upward accordingly.
- The share price peaks at a closing price of $15.00.
- The trailing stop trigger price is recalculated to $14.25 (5% below $15.00).
- The share price then begins to decline and closes at $14.50.
- As this closing price is lower than the previous day’s close of $15.00, the trigger price is retained at $14.25 and does not move lower.
- The following trading day, the share price continues to fall and reaches $13.00.
- As the price has now moved below the trigger price of $14.25, your Sell conditional order is triggered and placed into the market.
Using a Limit Price with a Trailing Stop Loss
If you choose to specify a limit price, your triggered Sell order will be placed at the limit price or higher.
Example
- Your trailing stop loss trigger price is $14.25
- You have specified a limit price of $14.30
As the trigger price ($14.25) is below your limit price ($14.30), once the order is triggered, the Sell order will be placed into the market at $14.30.