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In MT4 and MT5, the standard trailing stop is a client-side function. The terminal watches the price, and each time it moves far enough, the terminal sends a modification request to the server. If the terminal is closed, disconnected or frozen, the trailing stops moving.

The stop that exists on the server stays at its last position. It doesn't follow price anymore. A trader who sets a 5-pip trail, then leaves the computer on a flaky Wi-Fi connection, can end up with a stop 40 pips behind the market.

Server-side trailing exists on some platforms, notably some web terminals and cTrader's native version. In those cases the broker's system handles the trailing, and it works with the client offline.

Another quirk is the minimum step. Some brokers limit how often a stop can be modified, or require a minimum change in price. A trailing stop that tries to move every tick can get rejected repeatedly and stay put.

A quick test: set a trailing stop on a demo account, close the terminal, and watch what happens to the stop in the broker's web view. The result clarifies what is actually running where.

A small example: a long trade is opened at 1.0850 with a 5-pip trailing stop, so the stop sits at 1.0845. Price runs to 1.0880, and the trailing stop should now be at 1.0875. If the terminal loses connection at 1.0860, the stop stays at 1.0855. Price then runs to 1.0880 and falls back to 1.0850. The trade closes at 1.0855 for 5 pips, instead of 25.

The opposite also happens. A stale server-side stop that is too tight stays in place and gets hit by a normal pullback, while the trader believes it has moved.

Because the failure is silent, the usual way people discover it is by looking at a closed trade and seeing a stop far from where it should have been. Checking the stop levels in the broker's web platform or mobile app, which show the server's version, confirms what is actually in place.

For strategies that depend on trailing, a VPS with a stable connection and an automatic restart for the platform reduces the risk.

Has a trailing stop failed because the platform lost connection, and was the cause obvious at the time?

Yes, and the cause was not obvious at all until I went back through the history. I had a long on USDJPY with a ten pip trailing stop running from my laptop, and the laptop went to sleep when I stepped away for lunch. The trade had run about thirty pips in my favour by the time I closed the lid. When I came back, price had come all the way back and closed me out near my original stop.

At first I assumed the broker had done something strange. It was only when I compared the modification log with the time the laptop went to sleep that I saw the stop had stopped updating at exactly that minute. The server had kept the last level and nothing more.

Now any trade I want trailed is run from a cheap VPS that never sleeps, and the platform restarts itself if it closes. I also check the stop level in the broker's mobile app when I'm away from the desk, because that shows what the server actually has rather than what my terminal thinks.