Stop orders are usually used to limit potential losses in case the price suddenly rises or drops. When you place a stop order you set an entry/exit price point. Once the price surpasses the predefined entry/exit point, the stop order becomes an instant order and gets executed.
Example of stop sell order: If the current market price is 3000 KWD for 1 BTC and you wish to prevent potential losses, you may set a stop sell at 2000 KWD for 1 BTC. If the price drops to 2000 KWD for 1 BTC, your stop sell order will be executed and your BTC will be sold.
Example of stop buy order: The current market price is 3000 KWD for 1 BTC. The trader in a short position might want to set up a stop buy order for BTC at 4000 KWD for 1 BTC. The price then continues to rise to 5000 KWD for 1 BTC, so the trade has made a profit.
The Trailing Stop Order is more flexible than a normal Stop Order, since it automatically tracks the coin's price direction and does not have to manually reset like the normal Stop Order.
For example: Market price of BTC is 4800 KWD and you placed a Stop Sell Order at 4500 KWD, which is in our case 300 KWD below the current market price. Suppose the price of Bitcoin suddenly increases to 5500 KWD. You are now in a chance of "locking in" even bigger profit by manually repositioning your Stop Sell Order to a higher price.
Repositioning your Stop Order can be done automatically for you by enabling the "Trailing Stop" function.
In our case, Trailing Stop Order will automatically reposition the Stop Order if the price of Bitcoin increases while maintaining spread of 300 KWD between the Bitcoin spot price and Stop Order.