Take profit/stop loss orders relation with risk management.
Take profit/stop loss option is given by crypto exchanges as a trading feature to manage the volatility issues. To tackle the volatility of cryptocurrency, take profit/stop loss trade is implemented in trading that minimizes the chances of loss. We know that any winning trade can become losing one in matter of seconds. So you need a proper plan to make profit and excel in this field.
Swissblock futures trading encourage users to use take profit/stop loss to protect their capital by trading wisely in this volatile market. Self-discipline, strong mind is the main thing that a trader needs to develop in order to make money from crypto trading. If you find that you are losing every trade and the streak is continuous, then you can also disable your futures trading for some time.
But what can help you to in trading psychology and prevent the most unfortunate events? The only answer is to find out the right time for entering and exiting the trade. Analyzing the situation and finding out the right time to exit a losing trade is also an art.
Still your emotions are not in control while trading? Simply set up take profit/stop loss orders
This will lower your chances of getting stressed out and also this will protect your decision from emotional influences.
What are take profit/stop loss orders and it will help in trading?
Make it as part of exit strategy for every trade. These orders will be executed when the price reach the set value. Once the take profit got hit, the stop loss position will be nullified and the trade will be closed. On the contrary, if stop loss got hit, trade will close and this will cut down your further loss. In plain English, Take profit, let you have profit at your set point and Stop loss let you have your investment set to a particular loss and if the price of crypto goes further down, the trade will be automatically stopped and only a specific percentage will be deducted as loss.
If you are trading with proper technical analysis, using indicators on charts, trend lines setup with TP/SL, then there is no need to worry about your running trades and emotions coming in your way of decisions. Each trade you execute, you just need to be sure about your strategy beforehand. No one knows what will happen in the crypto world but what a trader can do is proper analysis of the technical proportions to make proper trades and exit points.
Benefits of Take profit/Stop loss
- It mitigates the loss
- Take profit can let you have profits locked at your required price
- Stop loss will cut down your losses and save your money
- Lowers stress
- You can engage yourself with other works while the trade goes on
How to setup TP/SL
Before setting up take profit/stop loss, identify the proper trade setup and determine your position. On swissblock app, it is easy to setup while setting up the trade. Go to the futures trading section and select the TP/SL option. Input the numerical values of Take profit/ stop loss and it’s done.
Proper risk assessment before trading:
Due to high volatility and risk, you should only invest in those projects which have strong fundamental basis. Carefully assess your trading experience, investment goals, profit/loss assessment and risk tolerance. The information listed in the blogs section shall not be used to formulate financial advice. It can be used to understand better about the cryptocurrency and banking. You should keep this thing in mind that any investment can go in profit as well as in loss. So swissblock always advise to trade with risk management.