Using Take-Profit Orders or Stop Loss

[joey alexander]

With exception of coins you are hodling in the medium to long-term, stop losses can prevent you from losing a lot of money if you're actively making trades and trading in multiple coins simultaneously to the point you can't watch them all. A stop loss forces you to evaluate what your exit point is when a coin drops in value. Sometimes a stop loss can backfire if you don't setup your loss margin correctly, as a rule of thumb I have my margin set at 10%. Meaning if I take a loss, it'll only be 10% of my investment opposed to potentially losing 20,30,40% if a coin tanks.
On the other hand, you should use stop losses in combination with take-profit orders. A take-profit order is the opposite of a stop loss, it's a target exit point where you're happy to take a profit and sell your coins.Just as important as a stop loss, a take-profit order can cause you to sell coins too early for say a 20% profit and the coin goes up 60% or even 100%+. learning to take profits and not being greedy will be a profitable trading mantra to live by in the long-run.Depending on where I see a coin going and what the charts are showing, I might only take a 15% profit on a coin. You should always use stop losses and take-profit orders with one another, unless you're hodling a coin medium to long-term.

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[CryptoIyke]

Very good write up, would have given you some merits if I had one, this is the bane of some  traders, the stop loss approach helps to minimize loss, once one enters a trade and the market goes against one, the best is to exit and reposition as more wait and anticipation could cause more loss. Particularly I am interested in finding an exchange that I can place a stop loss and take profit trigger at the same time, Binance doesn't have such

[richcorner100]

Not all crypto exchange have stop loss feature and this make crypto trading activity will be more risk, the price of crypto is always move with high volatility but we can not monitor and check the price all the times. So we need stop loss function to cut the loss immediately if the price crash and when we dont have times to do that by manually. Trading without use stop loss is more risk so its better to use exchange that has this feature.

[BitcoinTurk]

I think they are the two important elements that should be used. Especially for today's investors, many investors do not have any idea what these features are, and I don't know where they should use this feature. Both properties have different names, but they are used to prevent possible damage, and as I said in the previous sentence, many investors do not know exactly how the feature works. In particular, these new features must be learned by the new investors always avoid the damage situation or cause a serious damage is caused.

[Olalomi]

Thank you for the insightful write up about the significant of stop loss and take profit this one of concept I took very serious to avoid heavy losses when trading and I always calculate my stop loss based on the amount I wanted to risk I usually used 2% of my total investment and target a higher take profit as I believed in trading with amount of money I can afford to lose.

[wayancrypto]

Yes that right, trading without stop loss just the samething like gambling, beside stop loss we should be also use trailling stop and this function is more usefull to use when the price bull run so we will not missing bigger profit. My previous biggest mistake in crypto trading is did not use stop loss and this my mistakes was bring me loss alot of money, and now i will not do it again.

[atrocityx]

I agree but most things have to be evaluated individually.. but I do think in most situations stop losses make a lot of sense.. but the tightness of the stoploss should vary.  Some positions I take I only allow a 3-5% stop loss where as others 25%.. and you have to know where to put them so people won't sniff them out, especially in margin trading.  

[matthewoz101]

10% is a good rule of thumb for margin trading. I use a 1.5% stop loss for non marginal trading. Stop losses are useful in combination with using indicators, like trend lines, Fibonacci, etc.

[apityeh71]

I was loss much money in crypto trading because did not use stop loss,  I did know how stop loss work in crypto exchange.  But for now I just I know about it and I found not all exchange  provide this feature. For now I used exchange that only provide stop loss feature, because crypto is move in 24/7 but we not possible to monitor the price all the times.

[nasipadang]

That is good information and many traders should use it, but I think and from my experience that we often doubt whether we want to take profit orders or continue to HODL to maximum profits with greater risk, and sometimes we are often in a condition where we confused to do a stop loss but we also expect our coin bull.

[yanto@1977]

With exception of coins you are hodling in the medium to long-term, stop losses can prevent you from losing a lot of money if you're actively making trades and trading in multiple coins simultaneously to the point you can't watch them all. A stop loss forces you to evaluate what your exit point is when a coin drops in value. Sometimes a stop loss can backfire if you don't setup your loss margin correctly, as a rule of thumb I have my margin set at 10%. Meaning if I take a loss, it'll only be 10% of my investment opposed to potentially losing 20,30,40% if a coin tanks.
On the other hand, you should use stop losses in combination with take-profit orders. A take-profit order is the opposite of a stop loss, it's a target exit point where you're happy to take a profit and sell your coins.Just as important as a stop loss, a take-profit order can cause you to sell coins too early for say a 20% profit and the coin goes up 60% or even 100%+. learning to take profits and not being greedy will be a profitable trading mantra to live by in the long-run.Depending on where I see a coin going and what the charts are showing, I might only take a 15% profit on a coin. You should always use stop losses and take-profit orders with one another, unless you're hodling a coin medium to long-term.

Many people ignore about stop loss and take profit point because they believe will not loss and always win. I don't know where the mindset came from but I believe we have that specially when first time trade/ invest. Those thing is our limit, don't break it because that is they key to keep safe from biggest lost, trust me.

[vixcious]

I have heard a lot about this loss-prevention strategy, but I really do not have the experience of determining the margin of the altcoins that I have invested. I can not set the correct number to optimize my portfolio. Can you show me the method of determining the marginal cost? I really need it in my next big investment.

[yndye]

You should always use stop losses and take-profit orders with one another, unless you're hodling a coin medium to long-term.

I definitely agree to this one if you want to be a profitable trader in the long run. It take s discipline to have a stop loss and take profit order because there are cases wherein the coin might go up again after you sold it and it would just make you regret that you set a stop loss. The same would apply to take profit wherein there is a chance that the price would continue to go up after you take profit so when your greediness strikes, you will most probably regret it.

However, there is a tendency that the price would continue to go down or the price would go down after you take profit so that would be the time you are glad that you had that order. If you want to be a discipline trader then it's better that you have these orders.

[omonuyak]

I have heard a lot about this loss-prevention strategy, but I really do not have the experience of determining the margin of the altcoins that I have invested. I can not set the correct number to optimize my portfolio. Can you show me the method of determining the marginal cost? I really need it in my next big investment.

You should visit some of the forex trading sites and learn this free of charge.  https://forexpeacearmy.com and learned stop loss and takes profit free of charge and how to place them in trading. You can also learned how to "determining the marginal cost" from this site: https://corporatefinanceinstitute.com/resources/templates/excel-modeling/marginal-cost-formula/.

[tadpole_bitfrog]

That's right, but we need to figure out how much profit we can make and we should take the most profit-making order. Do not let greed guide you, because it only leads you to the white hands. Be careful and create the perfect plan as possible.

[Gozie51]

Just as important as a stop loss, a take-profit order can cause you to sell coins too early

The feeling that it is early to take a profit through take profit is not really the way to see it because if you delay to wait for more profit, you might get it or eventually start recording losses. For me, any point I decide to set my profit taking and it hits on it, I'm cool and happy.

The profit is always there for next time.

[Pursuer]

I use to use these types of automatic orders before and I even suggested them to others but nowadays I no longer believe they can be a good idea because of the way the cryptocurrency market works. it is too volatile and too unpredictable. it goes up and down out of nowhere sometimes and with all the altcoin pumps that are always going on you can never come up with a decent algorithm to act fast and sell your coins to prevent losses without actually making you to miss out on the pump.
now I prefer doing everything manually and with minimal automation.

[stomachgrowls]

I use to use these types of automatic orders before and I even suggested them to others but nowadays I no longer believe they can be a good idea because of the way the cryptocurrency market works. it is too volatile and too unpredictable. it goes up and down out of nowhere sometimes and with all the altcoin pumps that are always going on you can never come up with a decent algorithm to act fast and sell your coins to prevent losses without actually making you to miss out on the pump.
now I prefer doing everything manually and with minimal automation.

Automation would be only just good if we are away on our own pc and if you are a kind of trader which do trade on price swings or long term ones
but if we are a type of trader which do make active trades then i dont see this TP and SL would really be needed at all.

We can able to monitor or decide which range we would able to get out.Stop loss will only be usable or preferable on forex and stock markets
which do have lesser volatility.

[bongbong2014]

I have always liked exchanges that support stop loss orders, using reasonable stoploss orders will help me reduce significant losses when the market goes down undesirable because I can not folow the market 24/24.

[oceantiger]

Stop loss is a money management tool in trading. It is used to stop a running trade that has turned against the trader. If you do not use it definitely your trading capital will vanish with only one trade that has run against you. But when stop loss is used you will live to trade another day.