In this tutorial, you are going to learn about how to place trailing stop loss sell order on all cryptocurrency exchanges (Binance, Bittrex, Poloniex, KuCoin, HitBTC, CEX, Huobi pro, Okex, CoinEx) using TrailingCrypto.
This tutorial broadly consists of 4 sections
In the first sections, we will look at the brief introduction about the trailing stop loss order type.
After that, we will look at an example
Then we are going to learn how to place Trailing stop sell order on Trailingcrypto
Finally, we will look at how to check the status of the placed order.
Now let's understand what is trailing stop loss order type.
One of the most difficult decisions investors have to make is when to take profits and when to cut losses short. Some traders will prematurely sell as a price rises while others will hang onto their shares or coins far too long as prices plummet.
How can you prevent making the latter mistake? The trailing stop-loss order is one tool that can help you trade with discipline.
The trailing stop-loss order is actually a combination of two concepts. There is the “trailing” component and the “stop-loss” order.
A stop-loss order is when you specify a certain action to be taken at a certain price. If you buy a currency at $100 per coin and you set up an order for the coin to be sold if prices dip to $90, you have placed a stop-loss order. You can set a stop-loss order at any value.
However, the problem with stop-loss orders is their lack of adaptability; they are static and do not move. For example, if your $100 per coin moves up to $200 and the stop order stays at $90, your downside protection will be worthless.
The trailing stop-loss order adds a dynamic component to overcome this hurdle. With the trailing feature, the stop-loss order is no longer fixed but rather trails the price by a certain amount (usually a set percentage) that you specify. In doing so, one of the key advantages of the trailing stop-loss order is that it allows you to lock in profits rather than hold on to a stock for too long only to see your profits disappear.
Let’s have a look at the example.
In this example, I took the ETH and IOTA pair. For sake of clarity, I’ll use % change rather price change.
Let assume that I opened a position with trailing stop buy order at 0% with .75% trailing offset. At this point, min price will the maximum of entry price or market price. Since offsett is 1% so, the stop value will be always 1% less than the peak price. So, in this case, it is around -1%. Now the market gain 1.5% after the opening position. At this point stop value will be around .5%. Now marker futher rose up to 2.7%, so that stop value is around 1.7%. Even after the correction stop value have not changed. Finally the market sharply gained to 11%. At this point, stop value is around 10%. Even during sharp correction after the peak, profit is protected at 10%. When market touch stop value, a market sell order type will be placed on the respective exchange.
Another thing to keep in mind is that while the stop-loss price automatically rises with coin prices but it never decreases. That is, the stop-loss order will always be based on the coin’s highest price.
The major advantage is that this order does not put a cap on profits. Cointrailingcrypto.comtrailingcrypto.com can continue to rise and you will stay invested as long as prices do not dip by your predetermined percentage.
One caution, sometime in fast-moving markets, when currency price drops quickly, an order may get filled lower than predetermined stop price.