Meet the next article in our training series about Superorder. This guide covers one of the most prominent features called Trailing Stops — tools to manage Stop Losses automatically. Means, the system moves this order while the price rises, so you are protected from sharp unpredicted falls.
The described feature is widely familiar for traditional traders on stocks-and-bonds markets but the crypto community has fewer possibilities to use Trailings. Usually, only trading bots provide such options. With Superorder, you can place orders on all supported exchanges to get some advantage over other users.
Further, we will check the advantages of Trailing Stops, their features, and useful hints. Let’s go!
Trailings and Their Benefits
Trailing Stops aim at managing risks and optimizing potential profits. Generally, orders are similar to Stop Losses but performed without manual control, so you can set Trailing and leave the terminal.
The order’s operation principle is transparent. While setting Trailing Stops, you should specify the number of coins and the distance between this Stop Loss and the market price. Superorder will compare rates and your moving order will follow the rising price. In the case of fall, a Stop Loss will remain in the same position and finally will be executed to cut expenses.
Shortly, here are key points how the feature is useful:
- Secure profits.
- Don’t limit profits.
- Limit losses.
- Work automatically.
Further, let’ review two types of Trailing Stops.
Sell Trailing Stop
The first example acts as a Take Profit option. It sets a Stop Loss under the market price on the specified distance, e.g. you can put a Sell Trailing Stop for $3300 per BTC under the actual purchase rate of $3500. The order will move up following the rise of price like this (if you’ve specified the distance as $200):
- $3300 at $3500.
- $3800 at $4000.
- $4300 at $4500.
When the price will go down, the order will remain:
- $4300 at $4500.
- $4300 at $4400.
- $4300 at $4350.
Finally, the order will be executed and you will get pure profits: $800 (purchased at $3500, sold at $4300). And everything is automated!
Buy Trailing Stop
Similarly, you can set Trailings to get crypto for the best price. In this case, buy orders will be located right above the market price. For instance, you want to get some BTC while rates fall, so you put a Buy Trailing Stop and wait. When the price turns back, the order stands still and executes upon reaching the limit. In other words, Buy Trailing Stops are inverted Sell Trailing Stops.
Tips & Tricks
In conclusion, check a few noteworthy hints about Trailings and their usage:
- Try to find the perfect distance because too small range will result in premature closing order while too high one will nullify your profits.
- For different coin pairs, the distance will be different, too. Focus on 10% as average but use higher numbers for volatile positions.
- Trailing Stops are rarely used as entry orders but they are great when you already have an open profitable position.
- Especially, the feature is cool when the price quickly moves up because the market will compensate this trend with the abrupt drop.
Overall, remember that trading orders are tools and no more. The final results depend on your strategy, so be sure to design it properly. Trailing Stops are advanced tools which are pretty useful during bull periods but don’t use them brainlessly. Superorder facilitates creating successful strategies with the user-friendly builder.
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