A trailing stop order on Robinhood lets you set up an automatic buy or sell order that adjusts as a stock’s price moves. Unlike a regular stop order, which uses a fixed price, a trailing stop follows the stock’s price in one direction, helping you protect potential gains or enter a position after a price rebound.
In this guide, you’ll learn how to set a trailing stop order on Robinhood, choose between a percentage and a dollar amount, select how long the order stays active, and check or cancel your order.
What Is a Trailing Stop Order on Robinhood?
A trailing stop order uses a percentage or dollar amount to determine when an order should trigger as a stock’s price changes.
When you place a trailing stop sell order, the stop price moves up as the stock reaches new highs. If the stock’s price falls, the stop price stays at its highest level rather than moving back down.
For example, suppose you own a stock trading at $32.74 and set a trailing stop of 5%. Your initial stop price would be approximately $31.10.
If the stock rises to $35, your stop price increases to $33.25, which is 5% below the new high. If the stock then falls to $33.25, the order triggers and becomes a market sell order.
This approach allows you to benefit from further price increases while setting a level at which you want to exit the position.
A trailing stop order on Robinhood can also be used to buy a stock. In that case, the stop price follows the market downward and triggers a buy order when the price rebounds to the calculated stop level.
Keep in mind that the stop price is a trigger, not a guaranteed execution price. Because the order becomes a market order when triggered, the final execution price may be lower or higher than expected.
How to Set a Trailing Stop Order on Robinhood
Follow these steps to create a trailing stop order using the Robinhood app. This example uses a sell order for a stock you already own, but the process for a buy order is similar.
Step 1: Select the Stock or ETF
Open Robinhood and find the stock or exchange-traded fund (ETF) you want to trade.
If you’re placing a trailing stop sell order, select a stock or ETF you already own. For a buy order, you can select a stock or ETF you want to purchase.
Tap the investment to open its details page, where you can see the current market price and other information.
Step 2: Open the Trade Menu
Tap the Trade button, usually located near the bottom of the investment’s screen.
For a sell order, select Sell. If you’re setting up a trailing stop to buy shares, select Buy instead.
Robinhood will open the order screen, which typically starts with a market order option. You don’t want to submit a regular market order for this example, so you’ll need to change the order type.
Step 3: Choose Trailing Stop Order
Look for the order type menu near the top of the screen. Depending on the app version and interface, you may need to tap the current order type or the control displaying dollars.
Open the available order types and find the Conditional Orders section.
Select Trailing Stop Order.
Robinhood will display a screen where you can configure the trailing distance and see how the order works.
Step 4: Choose a Trail Percentage or Trail Amount
Robinhood lets you set your trailing stop using one of two methods:
- Trail percentage: Sets the stop price a specified percentage away from the highest price reached for a sell order.
- Trail amount: Sets the stop price a specified dollar amount below the highest price reached for a sell order.
A percentage-based trail adjusts proportionally as the stock price changes. A dollar-based trail keeps the same dollar distance from the highest price.
For example, a 5% trail on a stock trading at $32.74 starts with a stop price of approximately $31.10. If the stock rises to $35, the stop price increases to $33.25.
With a $2 trailing amount, the stop price would start at $30.74 and rise to $33 if the stock reached $35.
Choose the method that fits your trading strategy, then enter your preferred percentage or dollar amount.
Step 5: Enter Your Trailing Distance
For this example, enter 5 in the trail percentage field.
Robinhood calculates the initial stop price based on the current market price. If the stock is trading at $32.74, the initial stop price will be approximately $31.10.
Here’s how the order would work:
- If the stock falls directly from $32.74 to approximately $31.10, the order triggers.
- If the stock rises to $35 first, the stop price moves up to approximately $33.25.
- If the stock then falls to $33.25, the order triggers at that level.
The stop price adjusts as the stock reaches new highs, but it doesn’t move back down when the stock price declines.
You can use a different percentage or dollar amount depending on your preferences and the amount of price movement you’re willing to tolerate. A smaller trail may trigger more frequently, while a wider trail allows more room for price fluctuations.
Tap Continue when your settings look correct.
Step 6: Set the Time in Force
The next screen asks how long you want the order to remain active. This setting is known as the time in force.
Robinhood may offer options such as:
- Good for the trading day: The order expires at the end of the applicable trading session if it hasn’t triggered.
- Good till canceled: The order remains active until it executes or is canceled, subject to Robinhood’s applicable expiration limit.
In the example, the good-till-canceled option displays an expiration date up to 90 days later.
Review the available options and select the duration that suits your needs. The exact choices and expiration rules may vary depending on Robinhood’s current policies and the order type.
Tap Continue to proceed.
Step 7: Enter the Number of Shares
Robinhood will take you to the order screen, where you can choose how many shares you want to sell or buy.
For a sell order, check your account’s available holdings and enter the number of shares you want to sell. Make sure you don’t enter more shares than you own.
Review the order details, including:
- The number of shares
- Your selected trailing percentage or dollar amount
- The initial stop price
- The account used for the trade
- The order’s expiration date
You may notice that the initial stop price changes slightly while you’re moving between screens. This can happen because the stock’s market price changes, causing the calculated stop price to update.
If you need to change a setting before submitting the order, use the available edit option and review the updated details.
Step 8: Review and Submit Your Order
Before placing the order, carefully review Robinhood’s order summary.
Confirm that you have selected the correct stock or ETF, entered the right number of shares, and chosen the intended trailing distance and expiration.
Pay particular attention to the explanation stating that the order will convert to a market order if the stock’s price moves against your trailing stop by the specified amount.
This distinction matters because the stop price is not a guaranteed selling or buying price. If the market moves quickly, your order may execute at a different price than the trigger price.
Robinhood may also display an estimated credit for a sell order. Treat this as an estimate rather than a guaranteed amount.
Once everything looks correct, swipe up or use the displayed submission control to place the order.
You should see a confirmation that your trailing stop order has been placed.
If the confirmation shows zero shares sold out of the total number you entered, that is normal. The order is active but hasn’t triggered yet.
How to Check Your Trailing Stop Order on Robinhood
After submitting your order, you can monitor its status and check how the trailing stop changes as the stock price moves.
Open the order confirmation or navigate to the relevant order details in your Robinhood account. Select the order to view its information.
Depending on the order and the current app interface, you may see:
- Order status: Indicates whether the order has been placed, executed, or otherwise updated.
- Highest market price: Shows the highest price recorded for the sell order’s trailing calculation.
- Trail percentage or amount: Displays the distance you selected.
- Current trailing stop price: Shows the current calculated trigger price.
- Expiration date: Indicates how long the order can remain active.
For example, with a 5% trailing stop sell order, the stop price should increase as the stock reaches new highs. If the stock falls, the stop price should remain at the highest calculated level rather than moving lower.
Checking these details helps you understand whether the order is still active and how its trigger price has changed.
How to Cancel or Change a Trailing Stop Order on Robinhood
You may want to cancel your trailing stop order if your trading plans change or you no longer want the order to remain active.
To cancel it, open the order details and look for the Cancel Order button. Follow the confirmation prompts if Robinhood asks you to confirm the cancellation.
If you want to change the trailing percentage, dollar amount, or another setting, Robinhood may not provide an option to edit an already placed trailing stop order.
If editing isn’t available, cancel the existing order and create a new one with your preferred settings. Before submitting the replacement order, make sure the original order has been canceled to avoid having multiple active orders unintentionally.
If you’re only practicing with a trailing stop order, you can use the same cancellation process to remove it before it triggers.
Important Things to Know Before Using a Trailing Stop Order
A trailing stop order on Robinhood can help automate your trading decisions, but it doesn’t eliminate investment risk.
Here are a few things to keep in mind:
- Execution isn’t guaranteed at the stop price. Once triggered, a trailing stop order generally becomes a market order, so the execution price can differ from the trigger price.
- Price gaps can affect your results. If a stock drops sharply, your sell order may execute significantly below the trailing stop price.
- A narrow trail may trigger during normal volatility. A small percentage or dollar amount can cause an order to trigger after a relatively minor price movement.
- A wider trail allows more fluctuation. However, it may also allow a larger decline before the order triggers.
- The order needs to be monitored. Check its status and expiration, especially if you intend to keep it active for an extended period.
- Availability and settings can vary. Robinhood’s order types, eligible investments, and time-in-force options may change.
Consider how volatile the investment is and how much price movement you can tolerate before choosing a trailing distance. No trailing stop can guarantee a profit or prevent every loss.
Final Thoughts
Setting a trailing stop order on Robinhood is straightforward once you understand how the trailing distance works. Select your stock or ETF, choose Trailing Stop Order from the order menu, enter a percentage or dollar amount, set the order duration, and review everything before submitting.
The main advantage is that a trailing stop sell order can move upward as a stock rises without moving back down when its price declines. This can help you manage an exit strategy without having to adjust a fixed stop price manually.
However, remember that the trailing stop price only triggers a market order. It doesn’t guarantee the price at which your shares will be sold, so it’s important to understand the risks before using this order type.
