If you try and place a manual trade with too small a stop distance to the current price, you can get a similar message when the position is rejected.
Usually it also states what the minimum is. This should be available from your broker somewhere.
I guess your trailing stop was too small for the broker and got rejected, the only option for the trading system was to stop.
This minimum stop distance, I guess would need to be built into the system if it can get to a point where it could become too tight.
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