very new to stocks and just learning about trailing stop orders. In definitions online, I don't understand how the % drop parameter is used wrt the "peak" price. For example, my understanding of the order (and please correct me if needed) is that you could make a trailing stop order @ $100 and 10%, the stock will automatically sell if it drops below 10% "peak" market value. but what is this value? i.e. if the stock executes and peaks @ $100 and drops below $90 it will sell, but what if it executes at $100, rises to $110, and then drops below ~$100. will it also sell under a trailing stop order?
I have to confess that in all my years in the market, I have yet to use a trailing stop. It makes more sense once you actually enter your order. You got the definition down, try paper trade with your broker if they let you and test it out!
