Take Profit / Stop Loss Upgrade on BTCMEX
Take Profit / Stop Loss function has been improved on BTCMEX. Automated TP/SL settings are now live and available while placing the order on our platform. Bitcoin leverage trading has never been easier!
One of the most prominent features of a crypto derivatives exchanges, like BTCMEX, is Take Profit / Stop Loss (TP/SL) instructions. In traditional finance, Take Profit and Stop Loss orders are used as exit trading strategies to secure the profit or prevent further loss. They are successfully applied for crypto derivatives trading on the exchanges today.
In crypto derivatives, TP/SL are the instructions on an exchange that allow closing a position at a pre-set trigger price to lock in the profit or avoid forced liquidation.
Take Profit is an automatic order to close the position at a pre-set price with an acceptable profit. The Take Profit exit strategy is designed to cash-out immediately and protect your trading from the future price fluctuations and secure your profit.
Stop Loss is an automatic order to 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.
The leading exchanges have this function automated and allow to apply TP/SL settings while placing an order. The feature is extremely useful in the time of drastic volatility. When cryptocurrency price swings, it allows traders to lay back and secure their trades instead of constantly monitoring the screen.
Automated TP/SL went live on BTCMEX! Users can now set TP/SL instructions while placing a Limit Order or add to an already opened position.
Take Profit / Stop Loss can be set by selecting price and trigger in the order confirmation pop-up window. TP/SL trigger price can be entered manually or determined by the price distance (in USD) or by the rate of return (%) with the Quick Setup option. Users can also choose which price type (Last Price / Mark Price / Index Price) will serve as a trigger. Users can set or modify TP/SL instructions after opening a position.
The pre-determined TP/SL price serves as a trigger to lock in the desirable profit or set the affordable amount of loss.
When placing a Buy Limit Order to open a Long position (assuming that the Bitcoin price will go up), the Take Profit price trigger should be set at a price higher than the position entry price, while the Stop Loss price should be lower. The opposite is true for the Sell Limit Order.
To set the TP/SL for a Short position (assuming that the Bitcoin price will go down), the Take Profit price trigger should be set at a price lower than the position entry price, while the Stop Loss price should be higher.
Learn further about how to set the TP/SL instructions on BTCMEX.
To sum up, Take Profit (TP) and Stop Loss (SL) are important trading management strategies that allow users to exit trading with an acceptable profit or prevent further loss without constantly monitoring the market.
Try it out, on BTCMEX, today!