Rather than naming a fixed price, you name a reference and an offset. The venue re-prices the order for you as the reference moves, so the order keeps its place in the queue logic without you sending cancel-replace messages.
Common variants are primary-peg (to the near side), market peg (to the far side) and midpoint-peg. Most support a cap so the peg cannot chase past a price you choose.
Example: you buy with a primary peg and an offset of minus one cent, capped at 30.10. The bid is 30.00, so your order works at 29.99. The bid rises to 30.05 and your order re-prices to 30.04 automatically. The bid reaches 30.12; your order stops at the 30.10 cap and stays there.
Related: midpoint-peg, primary-peg, discretionary-order