How do trail stop and trail stop limit orders work in the world of digital currencies?

3 answers

• 09A31 Tarun Preet SinghDec 20, 2021 · 4 years ago
  Trail stop and trail stop limit orders are types of orders used in the world of digital currencies to manage risk and protect profits. A trail stop order is designed to follow the price of an asset as it moves in a favorable direction. When the price reaches a predetermined percentage or dollar amount below the highest price since the order was placed, the stop price is adjusted accordingly. This allows traders to lock in profits if the price reverses. On the other hand, a trail stop limit order combines the features of a trail stop order and a limit order. It sets a trailing stop price, just like a trail stop order, but also includes a limit price. If the price falls and reaches the stop price, the order is triggered and becomes a limit order to sell at the specified limit price. This helps traders protect their profits while also ensuring a minimum sell price.
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• sukesh sDec 11, 2024 · a year ago
  In the world of digital currencies, trail stop and trail stop limit orders are essential tools for managing risk and maximizing profits. These orders are particularly useful in volatile markets where prices can change rapidly. By setting a trail stop or trail stop limit order, traders can automate the process of adjusting their stop prices as the market moves. This allows them to protect their investments and secure profits without constantly monitoring the market. It's important to note that the specific mechanics of trail stop and trail stop limit orders may vary depending on the trading platform or exchange you're using. It's always a good idea to familiarize yourself with the platform's order types and settings before placing these types of orders.
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• Dmitry ShulgaAug 11, 2024 · 2 years ago
  Trail stop and trail stop limit orders are powerful tools in the world of digital currencies. They allow traders to protect their investments and lock in profits without constantly monitoring the market. These orders are particularly useful in volatile markets, where prices can change rapidly. For example, let's say you bought a digital currency at $10 and set a trail stop order with a 5% trail value. If the price increases to $15, the stop price will be adjusted to $14.25 (5% below $15). If the price then drops to $14, the order will be triggered and executed at the market price. This way, you can secure a profit of at least $4.25 per coin. It's important to note that trail stop limit orders add an additional layer of protection by setting a limit price. This ensures that your order will only be executed at or above a specified price, protecting you from potential slippage.
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