Check How Trailing Stop Sell Order Helps Lock In Your Profits & Limit Losses

The crypto trading marketing is a highly volatile and unpredicted area of profits and loss?

However, with the proper placement and implementation of a smart as well as strategized risk management tools, not only can you increase your profits but reduce your losses.

But the question is how to do it, and what those tools are that you can use to lock in your profits and limit your losses while trading cryptocurrencies when doing nothing.

Well, the best answer is the advanced yet amazing trailing stop orders, but before delving into their details, you must know about automated trading, and how it can help you get profitable results without keeping a vulture eye on the fluctuating market.

What is automated trading?

Automated trading is an easy solution for those looking toexperience profitable and reliable crypto trading. Thanks to its ease of use and flexibility, it is becoming an amazing option for those who want to enjoy consistent profits without monitoring the system.

Automated trading takes advantage of algorithms when it comes to buying and selling orders at specific times. Based on the automated trading strategy, trades are executed on the crypto asset price, technical indicators, and the proportion of value in your portfolio.

In all, the automated system helps you when you are running short of time to trade cryptos and reluctant to hold them for long. Now the question arises which are the best automated trading platforms you should go with when there are many to choose from.

Well, the simplest answer is the TrailingCrypto platform! Because over the years, this automated crypto trading platform has gained immense impetus compared to others.

The catch of this platform is that unlike other automated systems, it is supportive to all the major exchange adaptors such as Binance, Coinbase Pro, etc., thus security and safety is guaranteed when you choose to have an amazing crypto trading experience.

What’s more, the automated system also allows you to customize your investing as per your ease.

So, whether you are looking to accumulate your cryptocurrencies or hold them for long or tinker with the Trailing Stop settings, you will always find this terminal introducing new templates to its platform for you from time to time. But remember, you have to use it to set trailing stop sell orders and stop sell orders within your platform.

Now when you have understood how much importance an automated system has when you perform crypto-trading, it is important you know about the types of stop orders.

Types of stop orders in crypto trading

There are different types of stop orders in crypto trading that you can utilize to manage risk and execute trades, especially when you are doing nothing in the crypto area.

A few of them are:

1. Stop Loss Order: A stop loss order is a sell order that gets triggered when the price of a cryptocurrency falls below a certain level. This order type is used to limit losses in a trade by selling the cryptocurrency at a predetermined price.

2. Stop Buy Order: This order type gets triggered when the price of a cryptocurrency jumps above a certain level. This type of order is utilized to enter a trade when the price of a cryptocurrency is trending upward in the market.

3. Trailing Stop Loss Order: A trailing stop loss order is actually an advanced version of a stop order, but it chases (trails) the current market price by a set trailing value. This order type is used to lock in profit as the price of a cryptocurrency rises and to automatically sell the cryptocurrency if the price begins to fall.

4. Trailing Stop Buy Order: This order type keeps trailing or following the ongoing market price by a fixed trailing value. As a crypto trader, you can use it to enter a trade when the price of a cryptocurrency is trending upward and to automatically buy more of the cryptocurrency if the price continues to go up.

5. Take Profit Order: A take profit order is another type of sell order that gets executed when the price of a cryptocurrency rises to a certain level. This type order type helps lock in profit when the price of a cryptocurrency is trending upward.

These stop orders can be used individually or in combination to help manage risk and execute trades in a crypto trading strategy. The type of stop order will depend upon the individual trader’s objective and the market conditions at the time of the trade.

Now, let’s learn about the types of trailing stop orders.

Types of Trailing Stop Orders

In crypto trading, a trailing stop sell order, a trailing stop buy order, and a trailing stop loss order all refer to different order types that incorporate the use of a trailing value:

Trailing stop sell order: A trailing sell is the type of order that trails the current market price by a set trailing value, either as a percentage or a dollar amount. If the price of your crypto drops to the stop loss level, the sell order is automatically executed.

Trailing stop buy order: This stop buy order type trails the current market price by a set trailing value, either as a percentage or a dollar amount. In case the price of your crypto touches up to the stop loss level, the buy order will be automatically executed.

Trailing stop loss order: This trailing order type also follows the existing market price by a set trailing value, either as a percentage or a dollar amount. As the price of your crypto asset falls from the pre-defined stop loss level, the sell order is automatically executed or triggered, thus serving as a means of limiting potential losses.

So, the key difference between the above trailing order types is the action that is taken when the stop loss level is reached. A trailing stop sell order sells the crypto when the stop loss level is achieved; a trailing stop buy order buys your crypto assets when the stop loss reaches its level, while a trailing stop loss order sells your digital asset when the stop loss level is reached, working as a means of restricting potential losses.

Now that you’ve familiarized yourself with the types of trailing stop orders, next you’ll get to know what key benefits you get by properly placing a trailing stop sell order.

What is a trailing stop sell order?

If you are looking for a better option to gain better control on your order, a trailing stop order is an ideal option to go with. This advanced version of the stop order makes use of a trailing amount instead of determining a stop price. The trailing amount trails a crypto’s price that goes up for the buy orders or falls for the sell order. Trailing amount can be dropped down and selected in either percentage or points.

Thanks to its risks management capabilities, you can use it as part of your trading strategy.

So, by properly placing the trailing stop sell order, you can place a fixed stop pricefor the orders below the current market price based on the trailing percentage and amount.

In this type of order, the stop price keeps pace with the rise in the market price, and it continues to do so with the initial interval fixed by the percentage of trailing amount.

As the stop price is achieved, the order is executed at once, and the same applies to the buy trailing stop order. You can use this risk management tool to ascertain the conditions that automatically executes an order to sell the position. If you wish to do a trailing stop sell order, then you should place it at a price that was above the trade entry.

Let’s now try to understand the game oftrailing stop sell order with two examples below:

Example — 1.

1. You have bought 1,000 units of XYZ cryptocurrency at $10 each.

2. You set a trailing stop sell order with a trailing value of 5%.

3. The current market price of XYZ is $12. Your stop loss level is set at $11.40 ($12–5% of $12).

4. The price of XYZ rises to $15. Your stop loss level is automatically updated to $14.25 ($15–5% of $15).

The price of XYZ begins to dwindle. Once the price reaches $14.25, your trailing stop sell order is executed or triggered, and you sell your 1,000 units of XYZ at $14.25.

In above example, the trailing stop sell order helped you lock in some profit as the price of XYZ fell, while still allowing you to take advantage of potential price increases. If the price of XYZ had continued to rise, the stop loss level would have continued to trail the market price, allowing you to potentially capture even more profit.

(2). Now, let’s understand this by placing a trailing stop sell order with Bitcoin below:

1. You have bought 1 Bitcoin at $50,000.

2. You set a trailing stop sell order with a trailing value of 5%.

3. The current market price of Bitcoin is $60,000. Your stop loss level is set at $57,000 ($60,000–5% of $60,000).

4. The price of Bitcoin rises to $70,000. Your stop loss level is automatically updated to $66,500 ($70,000–5% of $70,000).

5. The price of Bitcoin begins to decrease. Once the price reaches $66,500, your trailing stop sell order is executed and you sell your 1 Bitcoin at $66,500.

So, in the second example above, the trailing stop sell order helped you earn some profit as the price of Bitcoin fell, while still allowing you to take advantage of potential price increases. If the price of Bitcoin had continued to rise, the stop loss level would have continued to trail the market price, allowing you to secure even more profit.

Thus, with proper placement of this risk management tool, you can have a risk-free crypto trading experience. Now, let’s learn about some of its key benefits in crypto trading

Benefits of Placing Trailing Stop Sell Order

Some major benefits of using a trailing stop sell order while doing crypto trading include:

Protecting profits: It allows you to lock in (secure) your profits as the price of your digital currency goes up, but at the same time allowing for unlimited potential profits.

Minimizing losses: The stop loss feature of the trailing stop sell order helps to minimize potential losses in the event of a price decline, thus minimizing your losses.

Ease of use: This trailing stop order type is easy to set up and manage. Best of all, it gets automatically triggered, even without the need for constantmonitoring of the market.

Flexibility: The trailing value can be set based on a percentage or dollar amount, giving traders the flexibility to tailor their sell strategy to their specific goals and risk tolerance.

Peace of mind: The automatic execution of the sell order of a cryptocurrency, in fact, eliminates the need for constant monitoring of the market, providing traders with peace of mind and allowing them to focus on other aspects of their trading strategy.

How To Use Trailing Stop Sell Order?

The process of using a trailing stop sell order on a platform can vary depending on the platform you use. However, here is a general guide to using a trailing stop sell order:

1. First, you need to log in to your crypto trading platform account.

2. Now, select the crypto you want to trade with and open the trade order form.

3. Thereafter, you get to choose the “trailing stop sell” order type.

4. Then set the trailing value, either as a percentage or a dollar amount.

5. Enter the desired stop loss price, which will trail the current market price by the set trailing value.

6. And now confirm the order details and finally submit the order.

The order will remain active and the stop loss price will automatically adjust as the price of the cryptocurrency fluctuates. If the price comes down to the stop loss level, the sell order will be automatically triggered. It’s important to note that the specific steps for using a trailing stop sell order may vary depending upon the platform you use, so be sure to check the platform’s help center or customer support for more information.

How a Crypto Trading Bot Can Help You with A Trailing Stop Sell Order?

A crypto trading bot can be programmed to use a trailing stop sell order as part of its trading strategy. A trailing stop sell order allows a bot to automatically sell a cryptocurrency once it reaches a certain price, helping to lock in profits. You can set up the bot to trail the market price of the crypto by a set amount, either as a percentage or a dollar amount, and sell the cryptocurrency once it reaches the stop loss level.

For example, a crypto trading bot might be set up to buy XYZ cryptocurrency when the crypto comes down to a certain level, and then sell it once the price touches up to 10%.

The bot would use a trailing stop sell order with a trailing value of 10% to sell the cryptocurrency once the price begins to fall, helping to lock in the profit. The stop loss level would be updated automatically as the price of the cryptocurrency changes, allowing the bot to continue to capture profit even if the price continues to rise.

Best Crypto Trading Platform

While there is a good range of crypto trading platforms to choose from, TrailingCrypto is one of the best crypto trading platforms, which has carved an immense niche among its users with its advanced and outstanding set of features, such as:

1. Advanced Charting: Its advanced charting capabilities include real-time market data and various technical analysis indicators that help you make informed trading decisions.

2. Portfolio Management: It features tools you can use to manage your portfolios, including the ability to view real-time balances and track the performance of your investments.

3. User-friendly Interface: It has an intuitive interface that makes it easy to navigate and trade on the go.

4. Security: It takes security seriously and provides secure storage for your assets.

5. Customer Support: It offers 24/7 customer support to help you with any questions or issues you may have.

But different traders have different preferences, so what works best for one person may not work as good for you. Therefore, it’s always important to thoroughly research any platform before using it and to carefully consider your own investment strategy.

At the fag end, it can be said that trailing stop orders are the most effective tools if as an enthusiastic crypto trader, you are looking to lock in your profits and limit your losses.

As I discussed above, there are several other best crypto trading platforms, but why crypto traders are adopting and embracing TrailingCrypto is its user-friendly interface, advanced charting, portfolio management, security and hassle-free customer support.

That apart, the platform too has great features for these orders and doing fully-automated trades.

What’s more?

It also offers the best crypto trading signals to help you automate your trading strategies.

Overall, it won’t be a exaggeration to say that this platform gets you rid of the pain of analyzing and validating quality coins in addition to high probability trade opportunities.