What is Trailing Stop (TS)?

We always hear trader/investor mentioned about trailing stop whenever the price going up or down. But what is Trailing Stop (TS) actually mean?

Buying (or selling, in case of a short position) is a relatively less emotional action than selling (or buying, in the case of a short position). When it comes time to exit the postion your profits are stating you directly in the face, but perhaps you are tempted to ride the tide a little longer, or in the unthinkable case of paper losses, your heart tells you to hold tight, to wait until your losses reverse. I believe the above statements are very familiar to most of the trader. Trailing Stop (TS) is a method/strategy to determind an exit point.

Very simply, the Trailing Stop (TS) maintains a stop-loss order at the precise percentage below the market price (or above, in the case of a short position). The stop-loss order is adjusted continually based on fluctuations in the market price, always maintaining the same percentage below (or above) the market price. The trader is then "guaranteed" to know the exact minimum profit that his/her position will garner. This level of profitability the trader will have previously determined based on his/her predilection toward agressive or converative trading.