![]() Well, you can check out Mitrade platform and see how simple it is to use the trailing stop. Trailing stop loss N% = Stop loss exits when the stock price falls N% from the high You see a trailing stop order usually works to protect already-won profits from being absorbed back into the market. That is, we can make a profit at +35% in the uptrends! If the stock price rose sharply by 50%! However, after that, the momentum of the stock price began to weaken, and it fell back to the starting point.Īt this point, if you set a traditional stop loss, you can only watch the $ float away again.Īnd if you set the trailing stop loss -15% strategy, it will be triggered when the price drops 15% from +50%. So trailing stop is equal to a traditional stop loss.Īfter entering the market, the stock price sprayed sharply. Please note whether the order can be successfully filled or not wholly depends on the market conditions.After entering the market, the stock price falls almost in a straight lineĪt this point, whether you set a traditional stop loss or a trailing stop loss of 15%, both are stopped at 15%. A market order will be placed once a trailing stop order is triggered, but the order may fail to be filled.Trailing stop orders may fail to be triggered due to drastic market fluctuations, price limits, insufficient margins, position limits, non-trading status, or other system issues.Before a trailing stop order is triggered, the user’s margin or positions will not be frozen. ![]() = (Highest Price - Rebound Price) / Highest Price Rebound Variance (5%) ≥ Trail Variance (5%).The last price reaches the activation price (31,000 USDT) to activate the order.Two conditions were met to trigger the trailing stop order: A sell order will be triggered at market price to close the position when the price retraces more than 5%, reaching and exceeding the trailing stop price at 33,250 USDT. When the price falls, the trailing stop price remains the same price level. When the price surges to 35,000 USDT, a new trailing stop price is formed at 33,250 USDT. The trailing stop price stops when the price declines. When the price increases to 32,500 USDT, a new trailing stop price is formed at 30,875 USDT. The calculated trailing stop price is 29,450 USDT. When the price surpasses 31,000 USDT, the activation price, the trailing stop order is activated. A user places a sell trailing stop order for a long trade with the parameters below: For example, if "Fair price" is set, the trailing stop will be activated when the Fair Price reaches or exceeds the activation price even though the Last Price does not reach the activation price.Īssume the current last price of BTCUSDT Futures is 30,000 USDT. Users can select either "Last price", "Fair price", or "Index price" as a trigger. The order will be activated upon placement if the activation price is not defined. The system will only start calculating the actual trigger price upon activation. The order will be activated when the price (subjected to "Price Type") reaches or exceeds the activation price. The ratio is the percentage of the price movement the variance is the price distance (USDT-M unit is "USDT" COIN-M unit is "USD").Īctivation price is the activation condition of a trailing stop order. The trail variance allows two input types: the ratio and the variance (Var.). Trail variance is the condition to determine whether a strategy will be triggered by using it to calculate the actual trigger price. Instead, it will close the order at market price when the price moves in the opposite direction by the percentage or amount set by users. The trailing stop moves by a specified percentage or a specified amount when the price moves favourably, but the trailing stop does not move back in the other direction. On the other hand, it allows an order to remain open and continue to profit as long as the price moves in the direction that users consider favourable. It helps users secure profit and limit the loss when the price moves in a direction unfavourable to users. A trailing stop order allow s users to place a preset order when a larger trail variance occurs.
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