A trailing loss is set when you are already sitting on a profit but see the momentum continuing. In such cases, you can set a trailing stop loss to lock in your profits and ensure that even in the event of a fall in price from higher levels; your profits up to a certain level are protected. Long-term investors use trailing stop losses quite effectively.
The concept of stop loss is intended to limit your downside risk, protect your capital and instill trading discipline in you. After all, in the long run, it is a discipline that matters in trading; much more than how often you are right on your trading calls!