I have created a CE strategy on Nifty 50 options and have kept the SL, TP, and TSL as 10,40, and 5 points respectively. How will this work in deployment? @Vasu_patel
If you are entering a Long position in your CE strategy and select the target profit (TP) as 40 points, Stoploss (SL) as 10 points, and Trailing Stoploss (TSL) as 5 points. Then, every time the position moves up by 5 points which is the assigned value for TSL, the SL will be revised by 5 points.
So if your entry is at 100 points then, the initial stop loss is 100-10= 90. Now as the selected TSL is 5 points, then if the price moves by 5 points i.e. if it goes to the 105 levels then the stop loss will be revised to 90+5=95. Similarly, with each 5 points movement in your trade direction, the stop loss will trail by 5 points, until your profit level is reached or the trailing stop loss is hit.
You can better understand the function of TSL through the below link-
Hope this helps.
Thanks for the explanation. My understanding is much clear now