Initial and Trailing Stops
How initial stops and trailing stops serve different roles in Turtle-style risk management.
Initial stops and trailing stops both control risk, but they answer different questions.
Initial stop
The initial stop defines the maximum planned loss if the entry fails. It is part of the trade before entry. A trader should know this level before placing the order.
Trailing stop
A trailing stop or channel exit manages an open position after it has moved. It can protect part of a trend while still allowing room for normal pullbacks.
Do not confuse the two
Moving a stop closer according to a rule is different from moving it randomly because of fear. Widening a stop because the trade is losing is usually a violation unless the system explicitly defines the condition in advance.