Dictionary of Finance and Investment Terms: trailing
trailing
historical as opposed to projected, usually referring to performance statistics measured in periods of a year. A trailing Price/Earnings Ratio (P/E), for example, would be the current price divided by the prior year's earnings, whereas a forward P/E would cover the projected 12-month period. In the case of a trailing stop order, the stop price is set at a fixed percentage below the market price and trails it; that is, it increases as the market price increases. It does not decrease, however, so if the market price drops and meets it, the stop loss order is activated.
