A trailing stop-loss is a type of stop-loss order that automatically adjusts the stop-loss price based on the market price, allowing traders to lock in profits while limiting potential losses. Here's how it works:

- _Initial stop-loss price_: The trader sets an initial stop-loss price, say 10% below the entry price.

- _Trailing amount_: The trader sets a trailing amount, say 5%, which determines how much the stop-loss price will trail the market price.

- _Adjusting the stop-loss price_: As the market price moves in favor of the trade, the stop-loss price is automatically adjusted upwards (for long positions) or downwards (for short positions) by the trailing amount.

- _Locking in profits_: The trailing stop-loss helps lock in profits as the market price moves in favor of the trade.

- _Limiting losses_: If the market price reverses and moves against the trade, the trailing stop-loss will limit potential losses by executing the trade at the stop-loss price.

For example:

- Buy a stock at $50 with a trailing stop-loss of 10% and a trailing amount of 5%.

- If the stock price rises to $60, the stop-loss price will automatically adjust to $57 (60 - 5% of 60).

- If the stock price continues to rise to $70, the stop-loss price will adjust to $66.50 (70 - 5% of 70).

By using a trailing stop-loss, traders can dynamically adjust their stop-loss price to lock in profits and limit potential losses, without having to constantly monitor the market and adjust their stop-loss manually.