Trailing Stop orders are, in fact, Trailing Stop Market orders. They behave exactly in the same way as Trailing Stop Limit until the trigger price is reached. After that, Trailing Stop order sends a Market order to the exchange, while Trailing Stop Limit places (you guessed it) a Limit order.
Trailing Stop (Market) order ensures that the order is filled immediately after it’s triggered. This order property is crucial when you use a Trailing order as a Stop Loss and/or Take Profit. However, if the price moves sharply, there is a risk that the order fills at a price that is higher/lower than the order trigger price.
Trailing Stop Limit order fixes the price at which the order will be filled. However, if the price moves sharply past the Limit price, there is a chance that your order won’t be filled and will ‘sit’ in the orderbook after it’s triggered.
Thus, the choice between the Trailing Stop (Market) and Trailing Stop Limit orders is a tradeoff between the certainty of order execution vs. the certainty of the execution price.
See detailed Trailing Stop Market vs. Trailing Stop Limit performance comparison in our blog post.