A trailing stop order provides flexibility over a stop order by executing once the market goes against you by a defined price, called the price distance. When margin trading, a trailing stop sell order can be used to protect profit.
Example: If the trader is in a long position and the current market price is 250 after a quick rise from 225, a trader can set a trailing stop with a price distance of 5. This will create a sell stop order at 245. As opposed to a normal stop order, if the market price continues to rise to 275, then the trailing stop rises accordingly, always staying 5 behind the market price; rising to 270 in this example.
The stop price trails behind the market price by the amount specified as price distance and allows for a stop to adjust to the market if the market moves in a profitable direction. If the stop is triggered, a market order is placed.