A limit + trailing stop order is an order made by an investor to a broker which combines a limit order with a trailing stop order. If and when the limit order is fulfilled, the trailing stop order is put in motion.
Example: You want to purchase shares in a company’s stock for no more than 130 Swiss francs per share, and then hold those shares as long as their price increases. You also want to make sure that the shares are sold as soon as their price beings to fall significantly.
By using a limit + trailing stop order, you get to choose the maximum amount which you are willing to pay for the share (the limit) and then select a percentage or value by which the rate would have to fall from any one point (the trailing stop) before it is automatically converted to a market order and the shares are sold by the broker. The limit order ensures that you do not pay more for the shares than you want to. The trailing stop order ensures that your shares will not be sold as long as their price increases, while also guaranteeing that your shares will be sold if their rate ever falls significantly.
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