Exit Psychology 3/5: The Trailing Stop – Patience vs Protection

NOTE – This is a post on Mindset and emotion. It is NOT a Trade idea or strategy designed to make you money. If anything, I’m taking the time here to post as an effort to help you preserve your capital, energy and will so that you are able to execute your own trading system as best you can from a place of calm, patience and confidence.

This 5-part series on the Psychology of Exits is inspired by TradingView’s recent post “The Stop-Loss Dilemma.” Link to the original post at the end of this article.

Consider this next scenario:
You’re in a trade and it’s working. Price is moving in your favour. You trail your stop in line with your plan. The trade moves your way and your trailing stop has started to lock in profit. Relief washes over you for a moment. Then price pulls back, tags your stop by a fraction and runs again without you on board.

Frustration rises: you protected your gains, but cut your winner short.

How behaviour shows up with trailing stops:
Trailing stops can be powerful, but the way we use them often reveals our mindset:

• Moving the stop up too quickly: Driven by the belief that profit isn’t real until it’s banked.
  
• Keeping it too loose: Rooted in the hope that one big win will make the difference.
  
• Adjusting based on emotion rather than structure: Reflects the belief that constant management equals control.
  
• Using the trail as a safety net when confidence fades: “I don’t trust myself to exit well without this crutch.”
  

The psychology underneath:
These surface behaviours are often driven by deeper beliefs and biases - the silent programs running in the background:

• Scarcity belief: “If I don’t protect every dollar now, it will disappear.” This drives over-tightening.
  
• Illusion of control: Adjusting the trail gives the feeling of mastery, even if it undermines expectancy.
  
• Hero trade belief: The idea that one outsized win can “fix” everything encourages overly loose trails.
  
• Identity fusion: For some, holding onto profit = being a “good” trader; giving it back = failure.
  
• Comfort-seeking: The nervous system experiences unrealised gains as already “yours,” so trailing becomes a way to protect identity as much as capital.
  

Why traders use trailing stops:
There are good reasons too. Trailing stops can:

• Protect profits without fully closing the position.
  
• Allow participation in bigger trends without micromanaging.
  
• Reduce stress when you can’t watch the screen constantly.
  

But just like initial and break-even stops, the challenge isn’t the tool, it’s the psychology behind how and when we use it.

Practical tips … the How:
The point isn’t the exact method you use, but whether your adjustment comes from structure or from stress. A few ways to build awareness:

• Define in advance what conditions justify moving the stop - structure, ATR, trend shift - not just feelings.
  
• Notice the difference between protecting and controlling. One preserves edge, the other chokes it.
  
• Journal: How many times has moving the trail early cost you a bigger win? Seeing patterns reduces self-deception.
  
• Practice nervous system awareness: when you feel the urge to “lock in,” pause and observe the sensation in your body before acting. Sometimes that’s enough to prevent a premature cut.
  

Reframe:
A trailing stop isn’t a way to eliminate uncertainty. It’s a tool to balance patience with protection. Used well, it keeps you in the move long enough to benefit, while still defining where you’ll step aside.

Closing thought:
The art of the trailing stop isn’t about perfection. It’s about holding the tension between fear of giving back and faith in your process and learning to stay in that space without over-managing.

A quick note to those who have signed up to the free newsletter on our website: please be sure to check your spam folder in case it’s found its way there.

A link to the previous post in this series - Exit Psychology 2/5 : The Break-Even Stop – Comfort or Illusion

A link to the original article as promised:

This is Part 3 of the Psychology of Exits series.
👉 Follow and stay tuned for Part 4: The Profit Target – Certainty vs. Potential.