Placing Trailing Stop Buy order via TrailingCrypto
Everyone wants to benefit as the price of asset moves higher and is willing to wait for the gains, but at the same time, one might think that it’s unlikely to happen. While you are waiting, the market may rise or fall. After all, there is no asset that goes straight up. Isn’t it? And, this is actually a normal part of the crypto market movement.
It could be painful to see your gains turning into losses. Managing risks and optimizing your profits are the two basic things in any successful trade. And, executing a Trailing Stop order can help you achieve both. So, what is a trailing stop order?
Trailing Stop Order
Trailing stop order is a risk management technique where a trader sets their stop loss level to trail the current market price by a predetermined value or percentage. In this order type, instead of using a fixed stop price, trailing stop follows the market price at a predetermined distance. This way it will help you maximize the gains and minimize loss potential.
This trading strategy is used as an exit order and protects your profits on the open trades. And, most of the time, traders use this order when they have an open position already accumulating profits with each price movement in the market. You can set this order type either manually or automatically through the best crypto trading terminal. And, TrailingCrypto is one such platform that allows you to place Trailing stop order smart in the right and best possible way.
There are two trading scenarios which will help you understand how trailing stop order works i.e. open long and short positions. These scenarios help one to execute buy orders and sell orders.
Trailing Buy Vs Sell Orders
Trailing Stop orders are used to determine when to execute a buy or sell order. Trailing stop sell order is executed when one is trading in an open long position. This is done to maximize your gains in the rising market and limit the losses whenever the market swings in another way.
On the other side, when you short sell, a trailing stop buy order will help you limit the losses when the market is going up. This also maximizes and protects your profits when the market moves down. Let’s understand about Buy Trailing Stop order in deep and how you can use it on TrailingCrypto:
Trailing Stop Buy
With a Trailing Stop Buy order, the stop price trails the lowest price of the asset by the preset trail. If the price of an asset rises above its lowest price by the trail or more, it will trigger a buy market order. And, the stock will be purchased at the best available price.
In this order type, the trader sets the initial stop price at a fixed price or percentage above the market price known as Trailing Amount (Offset). As the market price troughs, the selling price dips one-to-one with the market but always at the intervals set initially by the Trailing amount/percentage. If the price of asset increases, the stop will remain the same. When the stop price is hit, it will trigger a market order.
And, Trailing stop sell order is the reverse of this.
Let’s understand about Trailing stop buy order with an example:
Suppose you have bought BTC at $9500 and now you want to buy more. You decide to set a trailing stop buy with a price distance of $300 in the rising market. This way, as the market rises to $9800, the trailing stop order will be executed and a buy order will be placed automatically.
You are planning to buy BTC, but you think it will fall shortly due to market volatility. Now, you want to wait to buy the asset. You also think that if the price for BTC moves up by a defined amount, say 5%, it may even move higher. In order to help minimize the potential costs, you can set the offset to 5%. Here, your stop price will always remain 5% above the lowest price of BTC.
Say, BTC is trading at $1000 per asset current. Your stop price will start at $1050, which is just 5% above the current market price for BTC.
- If the price of BTC stays between $1000 and $1050, the stop price will stay here at $1050
- If the price of BTC falls to $900, the stop price will move to $945, 5% above the current market price
- And, if BTC rises to the stop price i.e. $945 or higher, it will trigger a buy order. And, BTC will be purchased at the best price available currently.
Placing Trailing Stop Buy Order at TrailingCrypto
- Select Trailing Stop Buy order
- Now select the base and quote coin. For example, Market USDT/BTC
- Select the number of coins you want to buy or select the percentage option as 10%, 25%, etc.
- Enter the offset value which is a fixed percentage value above the current market price. Using this, the stop loss will always will be remaining with an offset value of x% (0.00000001, 1.00000001, and so on). If the market moves up, the stop loss will not change, but if the market moves down, the stop loss value will also move down.
- Now you can submit the order and it will be executed automatically.
Deciding how to determine the exit points of your position depends on how conservative a trader you are. TrailingCrypto is the best crypto trading platform that allows its traders to use Trailing stops smartly by using signals or copying the trades of expert traders. This order type will let you excellently manage your risks and execute the orders well.