Stop Loss: An automatic order to fully or partially close the position at a certain pre-set price better than the Liquidation Price to prevent further loss.
The main purpose of the Stop Loss feature is to avoid Liquidation, during which a trader loses his entire Margin. Learn more about Liquidation on BTCMEX in the official Trading Guide.
For example, a trader has an open position with the Entry Price of USD 8,000 per Bitcoin and the Liquidation price USD 7,000. To secure the profit, a Take Profit order can be placed at USD 9,000. To prevent the loss of the entire Margin, the trader can set a Stop Loss at USD 7,200, which would prevent the Liquidation.
For more flexibility, with the TP/SL trading strategies on BTCMEX, users can choose to close the entire position or use a partial closing option.
Traders can choose to place a Stop Market or Stop Limit, placing a Conditional order on BTCMEX.
A Stop Market Order is executed as a Market order when the pre-set stop price is triggered.
The trigger price for a Long position must be set at a price higher than the Last Traded Price. And in the opposite way, the trigger price for a Short position must be set at a price lower than the Last Traded Price.
A Stop Limit Order is an alternative to a Stop Market Order, which allows traders to open and close a position at a favorable price.
By choosing this type of order traders can set both Limit Price and Stop Price, where the Limit Price is a trigger to open a position and the Stop Price is a trigger to close a position and limit loss.