Find out if you can use a Trailing Stop Loss order.
With a trailing stop loss, your won’t need to manually change the stop conditions. It is highly recommended to those who wants to insure themselves against unnecessary losses and nervous shocks.
What is a Trailing Stop Loss ?
A TSL is initially placed in the same manner as a regular stop loss order. The main difference between a stop loss and a trailing stop is that the trailing stop moves as the price moves, but if the price falls, the stop loss price doesn’t change. This is one of the base thing you need to know in case if you are not going to look at the screen 24/7.
To better understand a trailing stop, let’s consider an example.
If you have 1 ETH for $100, you could set the trailing value as a fixed percentage of 10% or a fixed spread of, say, $10. While the price moves up, the trailing price (stop price) will stay at 10% less than the current price.When the price falls, TSL will not change.
Stop Loss Versus Trailing Stop
The benefits of the TSL are two-fold. First, if the coin moves against you, the trailing stop will trigger when ETH hits $90, protecting you from further downside. But if it goes up to $120, the trigger price for the trailing stop comes up along with it.
Even now it seems so banging don’t set your expectations high enough, you got to be cold. Nobody knows what will happen while you are in the shower.
Suppose the price has reached of $120,then the trailing stop will only trigger a sale if ETH drops below $108. This helps you lock in most of the gains from the coin’s rally. On the other hand If we used a classic stop loss the selling price would be $90.
Over a period of time, the trailing stop will self-adjust, moving from minimizing losses to protecting profits as the price reaches new highs. The trailing stop offers a clear advantage in that it is more flexible than a fixed stop loss.
Take another look at our example below:
How to setup TSL:
- Switch on the slide button.
- Check the “Trailing” box.
- You can see “Bid” as the default choice; more options available here.