An Introduction to Trailing Stop (TS)

Feature Overview

 

Trailing Stop (TS) allows traders to place a pre-set order at a specific amount away from the market price when the market swings. It helps traders limit the loss and lock in profits when a trade does not move in the direction that traders consider favorable.

• After setting the "trailing distance", the system will update the TS price when the market moves in your favor. If the market keeps moving in your favor, the TS price can move past your entry price and turn into a TP price, helping lock in the profit in case the market moves against you.

Example:

1. A user buys long ETH at 3,000 USDT and sets the trailing distance at 100 USDT for TS.
2. If the last price never rises above 3,000 USDT, TS will be triggered at 2,900 USDT to close the position and stop loss.
3. If the last price surges to 5,000 USDT, a new TS price will be formed at 4,900 USDT. When the price moves down, the trailing stop price stops and will be triggered at 4,900 USDT to close the position. In this case, the stop-loss turns into take-profit, helping the user lock in 1,900 USDT profit.

 

Feature Illustration

 

How to set Trailing Stop

How to set and edit Trailing Stop

1. Enter your position page, tap on [...] and Trailing Stop to activate the Trailing Stop in the pop-up.
2. Enter a trailing distance. The trailing distance should be set at a level that is neither too small nor too large.
3. Save the setting and you will find the trailing distance or the TS price displayed on the position page. The TS price will move with the last price when the market moves in your favor.

 

TS Setting Rules

1. Enter a positive figure as the trailing distance and the system will decide whether it is positive or negative based on your position direction. For a long trade, the figure will be decided as negative; For a short trade, the figure will be submitted as a positive figure.
2. The trailing distance should be set according to the following limits:
   1. Default Max.: 90% of the last price of the cryptocurrency.
   2. Default Min.: 5X of the smallest unit price of the cryptocurrency.
   3. It cannot be 0.

 

Q&A

1. Why doesn't the TS price update itself when the best price appears?

• The system sets a trigger step size and if the price change does not reach the step size, the TS price will not move.
• [Trigger step size]: When the last price reaches the best price, the step size is 10X of the smallest unit of the cryptocurrency.
• E.g., A user buys long ETH at a market price of 3,400 USDT and sets the trailing distance at 1.00 USDT. When the best price reaches 3400.10 USDT, the TS price moves to - > (3400.10 - 1.00)= 3399.10 USDT.

2. Why is my position closed at a TS price higher than my entry price?

• This is one of the advantages of Trailing Stop. The TS price can move past your opening price when the market keeps moving in your favor. In this case, the TS price turns into a TP price and helps lock in profits when the market moves against you.

3. Can I set up both TP/SL and TS when placing an order?

• Yes. When you set up both TP/SL and TS, the system will trigger in order according to the latest price range.
• When the TS price exceeds the TP price, TP will be triggered before TS unless users cancel TP manually. The same goes for SL.