Is it possible to make a tools or already have; like the Stop loss limit feature

[Perfectbaby]

At first for this fo be possible, you must first hold your bitcoin into exchange or a place that allows the sell and buy functions otherwise if you leave your assets in a non-custodial wallet it could be hard for such effects to take place. That tools can only be deployed through centralized platform where your assets are stored over there.
Especially you have funds in that particular exchange or decentralized exchange, you can either connect the wallet to the Decentralized exchange and enable your tools where it would work automatically as you have programed your tools.

[Charles-Tim]

Another good example of automated stop lose failure incident is when the Luna crash happened.

Alot of trader's get liquidated despite setting a stop lose price their still get liquidated.

You are right that stop lose can fail on both sides, regardless if it DEX of CEX exchange.

Yes, but you are also right. People should know the kind of DEX they are using and know how the stop loss is. Stop loss are accurately filled on centralized exchanges than on decentralized exchanges. I completely agree with that. But just that there are some extreme volatile market that it will fail. What I just think is that people should learn how to use low leverage in a way that they can be able to still lose just a little amount of money during highly volatile market. The funniest thing was that when bitcoin fell to $100000, it increased back above $110000 within a short period of time and later increased to $116000 before falling again.

[Hamza2424]

But stop loss limit is only available in trading in CEX. In the case of Dex, is it possible to create such tools that will identify a large dumping at a certain distance as a trail risk and at the same time sell it like a stop loss limit?

Automating stop loss on DEX, never tried it before, but I am sure with little coding you can create an automatic bot for you. I am not using one or never used one because I never had to. But there is one distinction I have to mention that liquidity in DEXs vanishes quickly, so let's say you bought at $10/piece and set $8 as stop loss but even with your stop loss on DEXs you failed to stop loss due to lack of liquidity because it can be affected due to high slippage, and liquidity disappearing.

There are such tools, but maybe they can't help you in catastrophic events like FTX in DEXs.

[Zoomic]

I don't think that I have heard of any tools like this for altcoins on stop loss. Investing in altcoins is very risky and you should do that with only the amount of money that you can afford to lose because you are gambling. However, it will be nice if someone creates this tool but what if the price dumps drastically, can the tools still help, I doubt.

Imagine trusting a bot to help you decide what a could be a large dumb purely from price movement. Altcoins are very volatile and can make crazy moves in a very short period, it'll be a very poor decision to trust any tool to help you make trading decisions on altcoins. I'll not engage in such practice and if there are people who are benefiting from such tool, good for them. I just don't see myself gambling with my money on such tools.

[Odogwu-Blockchain]

How strong and how hard will such tools stay untill tail risks event happens, if you purchase a tool that watches over your investment and trading in Altcoin and then such event takes time to occur, won't the tools gets expired and need to be renewed, how much that could cost and I'm sure it's going to be pretty costly.

[CryptopreneurBrainboss]

But stop loss limit is only available in trading in CEX. In the case of Dex, is it possible to create such tools that will identify a large dumping at a certain distance as a trail risk and at the same time sell it like a stop loss limit?

A tool that triggers a stop loss for you on DEX? That defeats the Idea behind decentralization as you'll have to give that tool control to your coins before they can buy/sell for you. What's more ideal is to have a tool that monitors the market and gives you real time updates on what's going on in the market but you'll have to be the one to execute the trade yourself on the DEX. DEX shouldn't ube permitted to have such options because they aren't centralized exchanges or just make use of CEX if you're trading volatile altcoins that aren't well established than to get dumped on like in the case of Luna/FTX scenario. We still have telegram bots that can give you updates when there are massive selling orders or the market is dumping and all this can help instead of being unaware of what's happening in the market. You can't be trading in a decentralized way and be expecting to receive centralized feature's.

[shinratensei_]

I only checked Jupiter, and from their blog post it seems they just recently launched the trailing stop feature? It was posted on July this year iirc. I guess we'll see more DEXes develop similar tools in the near future. I can't imagine using another platform that offers nothing like that when the market behaves erratically, especially when it's not that hard to use. The alternative is to run your own bot connected with the API of the DEX you choose I guess, especially if you want more complex indicators to decide when and how much you'll sell. CMIIW.

Yes, Jupiter only integrated it recently and it's quite helpful. More DEXes to implement unless they don't love money and don't like their customers. If you want complex strategy, it will be through bot, it will watch oracle price > check the dex quote > execute. The strategy engine is usually built around oracle price even though there can be price different with the real dex quote. I prefer dex provided features over bot implementation because it's free, more accurate, and faster because they have access to internal tooling. Writing a bot to watch oracle and constantly quote dex price is a pain from my personal experience, but AI can do this in just 5 minutes if you don't want to write it yourself, just make sure you tested the security first and testing it on testnet.

[LogitechMouse]

I don't think that I have heard of any tools like this for altcoins on stop loss. Investing in altcoins is very risky and you should do that with only the amount of money that you can afford to lose because you are gambling. However, it will be nice if someone creates this tool but what if the price dumps drastically, can the tools still help, I doubt.

You haven't heard it because it doesn't exist at all.

When FTX and LUNA scandal happened, nobody knew that it will happen, and we know that there are many investors who lost their money on it. During the October 10th massive dump last year, nobody knew that it will happen (except for some insiders of course) and many lost their money. When a group of people suddenly dump the altcoins that they're holding, that creates a panic towards other token holders, and that panic will push them to sell their tokens at a loss creating more downwards pressure. There's no way for us to know that, and I don't think that there's a DEX that has the same things that the CEX has which is the stop-loss limit.

I don't think that there's anybody that will create it. Well, if you don't trust the project, simply don't buy it, and just focus on other top altcoins, or just Bitcoin.

[M47AK16]

Another good example of automated stop lose failure incident is when the Luna crash happened.

Alot of trader's get liquidated despite setting a stop lose price their still get liquidated.

You are right that stop lose can fail on both sides, regardless if it DEX of CEX exchange.

Yes, but you are also right. People should know the kind of DEX they are using and know how the stop loss is. Stop loss are accurately filled on centralized exchanges than on decentralized exchanges. I completely agree with that. But just that there are some extreme volatile market that it will fail. What I just think is that people should learn how to use low leverage in a way that they can be able to still lose just a little amount of money during highly volatile market. The funniest thing was that when bitcoin fell to $100000, it increased back above $110000 within a short period of time and later increased to $116000 before falling again.

You mean the kind of exchange, as what many implied, stop-loss mostly exist in a CEX. Don't really know the reason on why, when I think this is only a tool and is even automated. Stop-loss are there because of volatility. So even on an extreme volatile condition, they should work as is, unless only if the stop-loss that one use is not built well or co-incidentally experience a bug. Leverage is for getting extra return, so it is expected already that risk are higher here. What the guy above talking is not the problem of the stop-loss anymore but it is about the coin that is turning into a scam. It should be obvious that there is no stop loss can save that. Same thing can go if the exchange turned into a scam.

[Crypto Library]

tail risk is the highest when we invest in altcoins. The Luna incident in 2022 was unexpected for all of us. So if something like this happens now or in the near fututre, it will be unexpected for us.

First off you need to correct the bolded word, it's Trail risk and not tail risk, that terminology misuse can make the concept unclear for discussion and contributions..

Are you sure?  it is not the tail? As per the google and chatgpt gpt Trail risk is not that term which is use in the crypto or the others investment concept. Although I don't think people will misunderstand what I meant by this typo.

Is it tail risk or trail risk?
Seen its tail risk according to google

Thanks for the catch, sorry for the Typo. I have update my op.

Yes, but you are also right. People should know the kind of DEX they are using and know how the stop loss is. Stop loss are accurately filled on centralized exchanges than on decentralized exchanges. I completely agree with that. But just that there are some extreme volatile market that it will fail. What I just think is that people should learn how to use low leverage in a way that they can be able to still lose just a little amount of money during highly volatile market. The funniest thing was that when bitcoin fell to $100000, it increased back above $110000 within a short period of time and later increased to $116000 before falling again.

At the time of that incident, I was not actually in any investment or used the stop loss feature in the case of investment, so I actually did not remember the incident at that time.
However, if this is true, then stop loss features will not be effective in CEX due to liquidity during tail risk, then in case of DEX there is no question for the trail risk.

A tool that triggers a stop loss for you on DEX? That defeats the Idea behind decentralization as you'll have to give that tool control to your coins before they can buy/sell for you. What's more ideal is to have a tool that monitors the market and gives you real time updates on what's going on in the market but you'll have to be the one to execute the trade yourself on the DEX. DEX shouldn't ube permitted to have such options because they aren't centralized exchanges or just make use of CEX if you're trading volatile altcoins that aren't well established than to get dumped on like in the case of Luna/FTX scenario. We still have telegram bots that can give you updates when there are massive selling orders or the market is dumping and all this can help instead of being unaware of what's happening in the market. You can't be trading in a decentralized way and be expecting to receive centralized feature's.

I actually thought from the perspective you mentioned that if stop loss feature is added to dex then it will be detrimental to its decentralization, but in this case if examples and parameters are available and if it is easy to make, then it could be made with a little effort through vibe coding.

And if the matter is more critical, then we need to look for tools which give us signals about tail risk. By the way, do you know about any such tools, if you know please mention it.

[Rengga Jati]

Recently, I heard the term tail risk for the first time from this topic, but I already knew what tail risk actually means, like "Trail tail risk is a type of major risk or event that happens very realistically, such as the LUNA and FTX crash."

No denying that these incidents have taught us valuable lessons. Nothing here is 100% safe. We can only manage the situation as optimally as possible to mitigate risk. The cases involving Luna and FTX serve as important cautionary tales. Many people ultimately lost everything in the blink of an eye. This highlights the importance of using only "cold money" (funds you can afford to lose) for investments. Furthermore, do not keep your coins on an exchange for the long term. Doing so could backfire on us, as we cannot predict what future risks we might face.

Now I think the chances of  this type of tail risk is the highest when we invest in altcoins.

Investing in altcoins certainly carries very high risk. Just look at Luna. It used to be a top coin that was clearly thriving. Many people bought it because they had high hopes for it. Yet, it turned out that everything could completely collapse in an instant. This offers a truly valuable lesson. Especially for those who choose to invest in meme coins. Honestly, there is no certainty there. The risk is simply massive.

[AVE5]

From what I understood in my exploration, what can be done to avoid trail risk is either to invest only in Bitcoin or if you also invest in altcoins, you have to use tools that will suddenly give a large dumping signal or perform activities like Stop loss limit.

If you're investing on the bitcoin, you may have a very coordinated perspective in trusting its long term reliability as a hedge against inflations and with the involvement of the Etf where institutions are investing more on bitcoin, it can be said that one could earn a peace of mind and holds his bitcoin asset for a long term goal that even when volatility is discouraging, long term goal will always be the leaning wall why you don't have to panic.
But you see that of Alt coins, that's certainly irrational and relying on tool to determine its reliability status can be unjustifiable because I don't see any tool capable of determining the possession of the alt at a given time due to the inventors acting selfish an manipulative over the Alt markets. So not tool can be trusted in that perspective of mitigating loss. Just bear it in mind that you're in a whole package of risks.

[JeffBrad12]

But stop loss limit is only available in trading in CEX. In the case of Dex, is it possible to create such tools that will identify a large dumping at a certain distance as a trail risk and at the same time sell it like a stop loss limit?

A tool that triggers a stop loss for you on DEX? That defeats the Idea behind decentralization as you'll have to give that tool control to your coins before they can buy/sell for you. What's more ideal is to have a tool that monitors the market and gives you real time updates on what's going on in the market but you'll have to be the one to execute the trade yourself on the DEX. DEX shouldn't ube permitted to have such options because they aren't centralized exchanges or just make use of CEX if you're trading volatile altcoins that aren't well established than to get dumped on like in the case of Luna/FTX scenario. We still have telegram bots that can give you updates when there are massive selling orders or the market is dumping and all this can help instead of being unaware of what's happening in the market. You can't be trading in a decentralized way and be expecting to receive centralized feature's.

Router contract control people's money through spend allowance everyday and it is still considered as decentralized because ownership is revoked and it's a smart contract, not a guy in the middle, a simple stop loss on a dex isn't going to make it less decentralized becuase it works the same way. Just my 2 cents. Anyway, if i want to trade with such complexities, spare me the headache of trading it on a DEX i will surely use CEX for this use case scenario.

[Perfectbaby]

I don't think that I have heard of any tools like this for altcoins on stop loss. Investing in altcoins is very risky and you should do that with only the amount of money that you can afford to lose because you are gambling. However, it will be nice if someone creates this tool but what if the price dumps drastically, can the tools still help, I doubt.

Imagine trusting a bot to help you decide what a could be a large dumb purely from price movement. Altcoins are very volatile and can make crazy moves in a very short period, it'll be a very poor decision to trust any tool to help you make trading decisions on altcoins. I'll not engage in such practice and if there are people who are benefiting from such tool, good for them. I just don't see myself gambling with my money on such tools.

To be honest I do not even see myself any day trying to deploy any tools to trade after knowing how volatile altcoin could be in terms of price manipulation, how quickly could this signal you the trader to know moreover when you are not active and you have open a trade on a specific coin to trade and signal came up about a specific coin and before you could try to follow up the information and signals come from the bot one could have end up losing entirely what they have in their balance. I won't also even subscribe for such tools instead it would be better for me to focused one particular coin such as bitcoin alone.

[henmark]

Imagine trusting a bot to help you decide what a could be a large dumb purely from price movement. Altcoins are very volatile and can make crazy moves in a very short period, it'll be a very poor decision to trust any tool to help you make trading decisions on altcoins. I'll not engage in such practice and if there are people who are benefiting from such tool, good for them. I just don't see myself gambling with my money on such tools.

To be honest I do not even see myself any day trying to deploy any tools to trade after knowing how volatile altcoin could be in terms of price manipulation, how quickly could this signal you the trader to know moreover when you are not active and you have open a trade on a specific coin to trade and signal came up about a specific coin and before you could try to follow up the information and signals come from the bot one could have end up losing entirely what they have in their balance. I won't also even subscribe for such tools instead it would be better for me to focused one particular coin such as bitcoin alone.

You might find bitcoin as a less riskier investment but you can also look at the positive side here. With altcoins, you have high earning potential if you can mitigate the risk. You will have to be extremely careful when it comes to altcoins but for bitcoins, you can simply invest and forget about it. With altcoins, you will need to closely monitor the markets and watch for any sudden pump or dump scenario where you can easily lose money. If you spend some time in learning and understanding altcoin market, you can definitely make some profit out but you would need to invest your time beforehand.

Bitcoins have proved to be a safe form of investment where the chances of losing everything are null. Yes, there might still be minor loss because of the volatility but yet, you will never lose everything you have as long as you stick to spot markets.

[EL MOHA]

You might find bitcoin as a less riskier investment but you can also look at the positive side here. With altcoins, you have high earning potential if you can mitigate the risk. You will have to be extremely careful when it comes to altcoins but for bitcoins, you can simply invest and forget about it. With altcoins, you will need to closely monitor the markets and watch for any sudden pump or dump scenario where you can easily lose money. If you spend some time in learning and understanding altcoin market, you can definitely make some profit out but you would need to invest your time beforehand.

I think you’re already complicating the whole thing already. You started clearly that with alt-coin there is a high profitability potential that’s like flipping your money easily and you talk about mitigating the risk. I think you also actually know that the risk and the profitability potential are equal right because its volatility that drives both. Either volatility leads up or it leads downward.

While I do understand that you meant that there should be something like a closed stop loss. I will simply say treat alt coins has highly risky coins and trading them should heavily come with agreeing with its risk. As you are looking at making good profit don’t think that you can actually mitigate the risk.

[allthebitandbobs]

There are a few watchers which will notify us about any sudden dumping scenario so we can take informed decisions but one needs to be active with these watchers to know when and why to sell out. Tail risk has suddenly came into picture after late 2020. We saw a number of shady projects like Luna which actually wiped away billions from the market. Yet, people find another altcoin to invest and cover up their loss. I think these people are already risk takers and should not really worry about the money lost.

For decentralized exchanges, yes there can be such feature built but there are external sources doing the same job so it is not really mandatory for DEXs to implement this. Yes, they can add it as an additional feature which might catch attention from a lot of users like you and me.

[Arenga pinnata]

But stop loss limit is only available in trading in CEX. In the case of Dex, is it possible to create such tools that will identify a large dumping at a certain distance as a trail risk and at the same time sell it like a stop loss limit?

Actually, there are currently several DEXs that do have a stop-loss feature or at least something similar to a stop-loss. In fact, I remember using a new DEX that did have that feature, but I’ve forgotten its name because I tried quite a few last year. However, I do recall that it was promoted in one of those Telegram airdrops or something similar. They were holding a trading contest or something like that, and I gave that DEX a try.

But for some fairly well-known DEXs, stop-loss-like features are indeed already available. For example:
- dYdX, which does support stop-loss though for derivatives and also has an order book system,
- OKX DEX, also offers a dedicated stop order menu
- Binance Alpha, I think this one offers it too, and I just checked, and it’s indeed there. (But I don’t think Binance Alpha is a pure DEX.)

And there are a few other DEXs, like 1inch, that have similar features, but I’m not sure yet since I haven’t tried them. Oh, I just remembered that Hyperliquid also has stop-loss orders. It’s just that those are specifically for perpetual trading.

[The Cryptovator]

From what I understood in my exploration, what can be done to avoid trail risk is either to invest only in Bitcoin or if you also invest in altcoins, you have to use tools that will suddenly give a large dumping signal or perform activities like Stop loss limit.

But stop loss limit is only available in trading in CEX. In the case of Dex, is it possible to create such tools that will identify a large dumping at a certain distance as a trail risk and at the same time sell it like a stop loss limit?

Stop loss had been working for CEX perfectly. But I don’t believe it’s possible to implement stop loss like CEX. Based on liquidity and sell pressure, the DEX token price depended. So there needs to be something that will work as a middle decider when dumping that will help to sell, like, smart contract.

But it won't be an easy process, and probably that’s why DEX hasn’t been implemented by developers. At least I am not aware of any such system there. On the other hand, how about the holders who have been holding funds in a non-custodial wallet?

[CryptopreneurBrainboss]

For decentralized exchanges, yes there can be such feature built but there are external sources doing the same job so it is not really mandatory for DEXs to implement this. Yes, they can add it as an additional feature which might catch attention from a lot of users like you and me.

Still don't think it's necessary for them to have it and it doesn't give them any advantage as the reason people are using CEX isn't because they have stop loss options and DEX don't but other reasons that should be what DEXs should be focus on working so they can become better competitors and probably get some customers back from the CEX as right now DEXs are getting overshadowed and that shouldn't be happening in a market that's supposed to be decentralized. Majority traders don't even trade with stop loss ( not saying it's good) but just saying since it ain't there then it doesn't necessary have to. DEX should focus on better user interface, easy access to their platform without having to go through long process and just maybe they'll get buzzing again because the potentials are there but they're just lacking something.