Trailing stops and how platforms calculate them

A trailing stop is a stop order that follows price by a set distance as a trade moves in your favour. It never moves back toward the entry. This note shows how platforms calculate trailing stops, using one invented long in the E-mini S&P 500 future, ES, placed in Liquivue. The note on stop market versus stop limit orders covers what happens once a stop triggers.

The settings behind a trailing stop

A platform uses four settings to place and move a trailing stop.

1. The reference price is the price the stop follows. On a long, some platforms use the highest trade since entry and others use the best bid.
2. The trail distance is the gap between the reference price and the stop.
3. The step is how far price must move before the platform moves the stop again.
4. The start offset is how much profit the trade needs before the trail begins. An offset of zero starts the trail at entry.

The manual for your platform names the reference price it uses.

The example trade

The numbers below are an invented example of the calculation, not a trade plan. ES moves in ticks of 0.25 points, and one tick is worth US$12.50 per contract.

You buy 1 ES at 5,050.00 with a trail distance of 8 ticks, which is 2.00 points or US$100. The stop starts at 5,048.00. The table lists five trades in the order they print, and the platform trails from the highest trade.

At row 3 price falls, and the stop stays at 5,050.50. At row 5 a trade prints at 5,051.25, the stop price, and the stop triggers. If it fills at 5,051.25, the trade makes 5 ticks, or US$62.50 before fees. A stop market order can fill lower in a fast market.

How the step changes the stop

Now set the step to 4 ticks, one full point. The platform moves the stop only after price gains a full point on the last adjustment.

At row 1 price is 1.00 point above entry, so the stop moves to 5,049.00. At row 2 price is 1.50 points above 5,051.00. That gain holds one full step, so the stop moves 1.00 point to 5,050.00. At row 4 price is 1.25 points above 5,052.00, so the stop moves to 5,051.00. At row 5 price trades at 5,051.25, one tick above that stop. The stop does not trigger, and the trade stays open.

The trail distance is 8 ticks in both cases. Only the step differs, and with a 4-tick step the trade is still open after row 5.

How the start offset changes the stop

Set a start offset of 6 ticks with a 1-tick step. The stop stays at 5,048.00 until price reaches 5,051.50. At row 1 the trade is 4 ticks in profit, so the stop does not move. At row 2 the trail starts, and the stop moves up to 5,050.50. From there it follows the first table.

How the reference price changes the stop

Suppose the highest trade at row 4 is 5,053.25 while the best bid is 5,053.00. A platform that trails from the last trade sets the stop at 5,051.25. A platform that trails from the bid sets it at 5,051.00. That one tick decides whether the trade at row 5 triggers the stop.

Who moves the stop

Each time the trail moves, a new stop price has to reach the exchange. Your platform, your broker or the exchange can send it. If the platform holds the trailing logic and your connection drops, the stop may stay at its last price. Read your platform's trading guide to see which one holds the order.

The same trade in Liquivue

Liquivue lists chart, DOM and panel orders with brackets, OCO and trailing stops. For this example, enter the long from the Liquivue DOM at 5,050.00 with a bracket. The bracket holds a profit target and a stop, linked as OCO, so a fill on one cancels the other. Set the stop to trail by 8 ticks. This site has not verified which reference price the Liquivue trailing stop uses or which step settings it offers, so read the Liquivue trading guide before you rely on the numbers above.

Liquivue session risk controls work at the session level, not per order. Profit protection keeps a trailing floor under the session's profit. Max session loss cancels orders, closes positions and locks trading for the rest of the session. Once a rule starts, Liquivue does not let you loosen it for that session. On the NinjaTrader bridge, Liquivue says live-account acceptance is unverified and tells you to start in simulation.

The notes on bracket orders and OCO orders cover the target and stop pair.

Trailing stops on other platforms

Bookmap adds live futures execution from its Global+ tier. Quantower includes a DOM Trader in its free tier. NinjaTrader lists free simulation and Market Replay, so you can test trail settings without live fills. This site has not compared trailing stop settings across these platforms, so check each manual for the reference price and step.

A check you can run

Open a simulation account and place the same long twice, once with a 1-tick step and once with a 4-tick step. After each new high, write down both stop prices. If the two columns differ by more than one tick at any row, note the step setting beside every trade you log with a trailing stop.