A trailing stop automatically moves your stop loss as the market moves in your favor, locking in profit while the trend runs. It sounds perfect — but on MT5 it has a limitation most tutorials skip. Here's how it really works and how to use it correctly.
How a Trailing Stop Works
Imagine you're long and the market rises. A trailing stop of "50 points" keeps your stop loss exactly 50 points below the highest price reached since you enabled it. If price keeps climbing, the stop climbs with it. If price reverses by 50 points, the stop triggers and closes the trade — protecting the profit you've accumulated.
How to Set a Trailing Stop on MT5
- Open the Trade tab and find your open position.
- Right-click the position.
- Hover over Trailing Stop in the context menu.
- Choose a distance — None to disable, or a point value (e.g. 25, 50, 100 points).
The option "Custom" lets you type any value. Note that MT5 measures the trailing distance in points, not pips — for most forex symbols, 1 pip = 10 points, so a "50 point" trailing stop is 5 pips.
The Critical Limitation: MT5 Trailing Stop Needs the Terminal Open
This is the part that catches people. On standard MT5, the trailing stop is handled client-side — it runs on your device, not on the broker's server. Consequences:
- If you close the terminal (or the mobile app) or lose connection, the trailing stop stops updating. Your stop freezes at its last position instead of following price.
- When you log back in, it may resume from the last stored level, not from where the market actually went while you were away.
This is a big deal if you're a prop firm trader. If your strategy depends on a trailing stop running 24/7, a client-side trailing stop on a closed laptop will not protect you overnight.
Server-Side Alternatives to a True Trailing Stop
If you need trailing protection that survives disconnection, look for a server-side solution. Many brokers and prop firm platforms offer server-side stops (sometimes called "auto-breakeven" or "guaranteed trailing"). These run on the server, so they keep working even when your device is off.
Check with your specific platform — for example, several futures prop firms (Apex, TopStep) handle trailing drawdowns on the server side as part of their risk rules, which is a different concept from an order-level trailing stop.
Trailing Stop vs. Fixed Take Profit: A Quick Comparison
- Fixed take profit: closes at one exact price. Predictable, but caps upside.
- Trailing stop: follows price, letting winners run. Less predictable, and on MT5 it needs the terminal open.
- Best of both: bank part of the position at a fixed target, and let the rest trail.
When a Trailing Stop Is Worth Using
Trailing stops shine in trending markets where you want to stay in as long as momentum holds. They're less useful in choppy, ranging conditions where a normal stop would get hit repeatedly anyway. If you can keep the terminal open during your trade, an MT5 trailing stop is a solid tool — otherwise, prefer a fixed target or a server-side stop.
A Worked Example: Trailing 50 Points on a Trend
You're long one lot of USD/JPY at 150.00 and set a 50-point trailing stop (5 pips). Price climbs to 150.50, so the stop trails to 150.00 (breakeven). At 151.00 the stop is at 150.50 — you've locked in 50 pips of profit. If price then reverses to 150.50, the stop triggers and you bank the gain automatically.
Compare that to a fixed target at 150.80: the trailing version let you ride to 151.00 and still exit at 150.50 on the reversal. That's the trailing stop's real power — it never caps your upside.
Why MT5 Trailing Stops Catch People Off Guard
- They stop when the terminal closes — the single biggest gotcha. Your "protection" freezes the moment you shut the laptop.
- Points, not pips — 50 points is 5 pips on most pairs, not 50 pips. Misreading this destroys the risk math.
- They lag in fast moves — a trailing stop is always behind price, so a sharp spike can fill you far from the trailing level.
- Whipsaw in ranges — in choppy markets the stop gets hit over and over for small losses.
FAQ: Trailing Stops on MT5
Does a trailing stop work when the terminal is closed? No — on standard MT5 it's client-side and stops updating. Use a fixed target or a server-side stop for hands-off protection.
How do I turn a trailing stop off? Right-click the position → Trailing Stop → None.
What's the difference between trailing stop and trailing drawdown? A trailing stop is an order on your trade; a trailing drawdown is a prop-firm account rule. Different things entirely.
Bottom Line
Setting an MT5 trailing stop is easy: right-click → Trailing Stop → choose a distance. Just remember its one big flaw — it only works while your terminal is connected. For hands-off protection, pair it with a fixed take profit or a server-side stop from your broker.