Ok, I can see how to change a stop to a trailing stop on an open position.
My question is:
what happens to the previous stop? Does it disappear and leave me with no stop until the trailing stop is activated?
I have an open position on XSTOCK @ 10 per point. Current price of XSTOCK is 100. I set a normal stop of 95. So under normal circumstances my max loss should be 50 whne the stop gets triggered at 95.
Now, lets say XSTOCK rises to 120 and I now wish to change from a normal stop to a trailing stop.
According to the instructions by IG, the trailing stop on a long position must be above the current price. So I want a trailing stop of 3 with a step of 1. According to IG instructions, I would need to set this to a minimum of 124 in this instance (120+3+1) and the trailing stop would be activated once the level reaches 124.
That's fair enough. But what happens to the normal stop? Lets assume the trailing stop criteria is set (it will activate at 124 in this case) but XSTOCK never reaches this level to activate the trailing stop. Instead it gets to 123 and then tanks.
Prior to this, I would of had a normal stop of 95 to offer some protection. Is this now gone and XSTOCK can keep going down without executing a stop?