How to use trailing stop limit orders - Tutorial

[@taxationisslavery2723]

Why is it possible on charles schwab to choose trailing stop when you select buy as welll? If you select buy and order type trailing stop, is it a market buy with a trailing stop sell order? Both a buy and sell with one order?

[@Freedomthirtyfiveblog]

I'm not too familiar with the Charles Schwab platform. But usually the trailing stop buy order is for people who want to short the market. A stop buy order is similar to a stop sell order, but the opposite. The stop price is above the current market price instead of below. And you limit the loss on your short position if the stock goes up instead of limiting the loss on a long position if the stock goes down. For example, if you think Apple will fall, you can short sell the stock at today's market price of $230. Then you create a trailing BUY stop order, with a $10 trail amount. If AAPL falls, your negative shares make money. But if the stock goes up to $240, your buy order will trigger and you will buy back the shares for a $10/share loss.

[@taxationisslavery2723]

@@Freedomthirtyfiveblog thanks