Understanding Take-Profit and Stop-Loss Orders
Take-Profit (TP) and Stop-Loss (SL) orders are predefined trading instructions that automatically execute when the market price reaches specified trigger points. These tools help traders lock in profits or limit losses without constant market monitoring.
Key Definitions:
- Take-Profit (TP): Automatically sells an asset when its price rises to a target level, securing gains.
- Stop-Loss (SL): Triggers a sale when the price drops to a predetermined level, minimizing potential losses.
Currently, these features are available in spot trading on our platform.
Benefits of Setting TP/SL in Limit Orders
- Automate Trading Strategies: Predefine exit points to execute trades even when you’re not actively monitoring the market.
- Risk Management: Set clear profit targets and loss limits to safeguard investments.
- Precision Control: Use trigger prices to time order execution based on market movements.
What Is a Trigger Price?
The trigger price is the threshold at which your TP/SL order activates. Once the market hits this price, the system submits your order.
Note: Execution depends on:
- Order type (limit/market).
- Market liquidity.
- Price volatility.
Example of TP/SL Configuration
Scenario: Buying Bitcoin (BTC) via a limit order:
- Limit Price: $50,000 (buy price).
- Quantity: 1 BTC.
- TP Trigger: $55,000 (sell to secure profit).
- SL Trigger: $45,000 (sell to cap losses).
Outcome:
- If BTC hits $55,000, the TP order sells 1 BTC.
- If BTC falls to $45,000, the SL order sells 1 BTC.
Factors to Consider When Setting TP/SL
- Market Volatility: Highly volatile assets may need wider TP/SL ranges to avoid premature triggers.
- Risk Appetite: Align levels with your tolerance and strategy.
- Market Trends: Adjust settings based on current conditions (e.g., bull/bear markets).
Step-by-Step Guide to Setting TP/SL
1. During Order Placement
- Navigate to Spot Trading → Select [Limit Order].
- Enter price/quantity → Tap [Buy].
- On the confirmation screen, click [TP/SL].
- Set [TP Trigger Price] and [SL Trigger Price] → Confirm.
2. Post-Trade Setup
- Go to Spot Trading → Choose [TP/SL] or [Two-Way TP/SL].
- Input trigger prices and quantity → Tap [Sell].
FAQs
Q1: Can I modify TP/SL after submission?
Yes, pending orders can be edited or canceled before execution.
Q2: What happens if the market gaps past my trigger price?
Orders execute at the next available price, which may differ from the trigger price.
Q3: Are TP/SL orders free to place?
No fees for setup, but standard trading fees apply upon execution.