Want to benefit from the volatile cryptocurrency markets? Do you really want to minimize your losses and protect your profits? If yes, then you must understand the most profitable strategies and crypto trading tools.
So, you want to benefit as the price of your crypto assets moves higher and you are willing to wait for the gain, but you think that can’t happen immediately. While you are waiting, the prices are moving up and down. It can be painful to see when a gain evaporates and turns into losses. Now, you want to control your losses. But how much and how can you do that?
Of course, that’s possible with Trailing Stop Limit Order. This tool will give you some control over the volatile movements in the market.
You might also be interested in knowing about the Polkadot(DOT) protocol in blockchain. Have a look at what is Polkadot?
How does a trailing stop limit order work?
A trailing stop limit order is designed to allow a crypto trader to specify a limit over the maximum possible loss, without setting a limit on the maximum possible gains. This is a different kind of order which comes with a stop-limit trail interval for extra downside protection. TrailingCrypto is one of the best crypto trading terminals that allow its traders to place trailing stop order smartly and automatically.
This order type allows its traders to set a Trigger Delta which is how much the price of crypto asset could fall before you place a sell or rise before placing a buy order. You can specify trigger delta as a percentage or amount. Once after setting the trigger delta, TrailingCrypto continuously recalculates the price which will trigger your order, based on the current market price of the asset as it moves in the favorable direction. If the market price changes directions, your trigger price won’t change.
Whenever your order is triggered, the buying or selling of the crypto asset will be a limit order. You will determine the limit price by specifying how far from the trigger price, you will allow the buying or selling of the asset. This is called Limit Offset.
Trailing stop limit sell
A trailing limit sell order moves with the market price, and continuously recalculates the trigger price at a fixed amount below the market price, based on the user-defined trailing amount. The limit order price is calculated based on the limit offset. As the price increases, both limit price and stop price increase by the trail amount and limit offset. But if the price falls down, the stop price will remain unchanged. So, Trailing limit sell order is one of the best crypto trading tools where the limit sell order trails the market price of the cryptocurrency pair. Let’s understand it with an example:
Suppose a trader places a trailing limit sell order for XBT/USDT. Then, the trader sets the trailing gap or trigger delta as 10%. Therefore, the limit sell order will always be 10% away from the market price of XBT/USDT. If the pair moves from 9,500 to 9,400, the trailing amount recalibrates.
This way, the distance between the market price of the pair and the limit sell order remains 10%. However, if the pair increases in value, the limit sell price does not go down.
How can one place trailing limit sell order at TrailingCrypto?
- Firstly, you have to choose the desirable exchange
- Click on the orders window, and select Trailing Limit Sell
- Once after specifying the order type, enter the parameters. For example, you can choose the market as USD trading against Bitcoin. Specify the quantity as 5 BTC or 10 BTC, or whatever you want. For the offset, you may choose 10%. Now, it’s time to submit an order.
- Now the submitted order will be displayed on the order window.
Trailing stop buy order
This order type is an exact mirror image of the trailing stop limit sell order. It can be used to protect profits generated through short selling or while you are trying to buy any stock which is bouncing off due to market low.
Below are the steps to place trailing stop buy order at TrailingCrypto:
- Choose the exchange
- Select Trailing stop buy order
- Select base and quote coin. Now choose the number of coins which you want to buy. You can also select the percentage option. Say, 10 BTC or select 10% of BTC.
- Enter the quote coin price at which you buy. If this field is left blank, the current market price will be used.
- Now select the offset which is a fixed percentage above the current market price.
- Submit order
Suppose the offset value is 3%. And, Quote Price of your selected crypto asset was 0.01623 while placing the order. Assume market dips to a value of 0.01421, and then started to rise. Since this is the lowest price, the stop value will be 0.01421 * 1.03 = 0.01464. Now, whenever the market hits a price above 0.0146363, a market buy order will be placed.
