Trailing stops live in different places, and that decides what happens during an outage

[Shadow Trader]

A trailing stop can be handled by the server or by software on a local machine. The two behave very differently when something goes wrong.

A server-side trailing stop is managed by the broker. It keeps working if the home internet fails, the computer crashes or the VPS reboots. Only a few platforms and brokers offer it.

A client-side trailing stop, the default on many platforms, is a program that moves an ordinary stop as price moves. If the program stops, the stop stays where it was. If the connection drops, the trailing function pauses. A position that had been protected by a trailing stop may sit with a distant original stop.

This matters most during the very moments when failures happen, volatile periods and busy servers.

Checking which kind is in use takes a look at the platform documentation. If it's client-side, the risk can be covered with a hard stop placed on the server at all times, and the trailing logic adjusting it.

Has a trailing stop ever failed to trail because of a disconnection?