How to set stops and take profit?
When deciding how to set stops and take profits, it is important to understand the importance of properly defining profit and loss limits.
To avoid financial losses and not miss out on profits, beginners are advised to start trading on a cryptocurrency exchange with information on how to set stops and take profit.
How to set stops?
In order to set SL (stop loss), you need to go to the “Sell” section in the exchange interface and select the order type – “Stop Limit”. Before that, you need to figure out how to create an order to buy / sell on the exchange. A regular pending position has only one price. SL also has a second trigger, without which it is impossible to place an order.
For example, a cryptocurrency was purchased at a price of $1,000 per unit. The trigger is $950. As soon as the quote of the digital asset drops to $950, a pending order to sell at a price of $95 will automatically appear in the system. Thus, the losses will be only 5%, and not more.
How to set take profit?
To place a TP order, it is enough to determine the desired price of the cryptocurrency, selling which the trader remains in the black. When the quote reaches the specified level, the position is immediately closed automatically.
In the terminal of the exchange, select the “buy” section and indicate the type of order. Next, you need to enter the price at which the digital asset will be sold. After that, it remains to set the required number of coins for sale and confirm the order by pressing the appropriate button.
A TR order placed on the exchange will appear in the list of open orders. As soon as the order is executed, it will disappear from the menu. Until this moment, the trader has the opportunity to cancel the take profit at any time or replace it with a new one.
Users can put up any amount of TP within their own deposit. The use of this opportunity is the next step in the formation of a diversified strategy.
For example, you can place several take profits on an existing deposit:
- the first for 10% at $220;
- the second by 20% at $240;
- the third for 30% at $260.
So the user will receive more profit with a stable, but fairly rapid growth of the cryptocurrency. The strategy can be complicated if you understand what a resistance line is.
Once a trader on a particular site has figured out how to set stops and take profit, it is important to check if an OCO order service is available. This is how both pending positions, SL and TP, are placed simultaneously. In case of execution of any of this pair, the second one is canceled automatically.