How to Take Profit in Crypto Trading
Crypto trading is what is currently trending in the business world. People are boasting of huge profits and some may face enormous loses in their investments. The volatility of the cryptocurrency stock market makes it hard to identify when there is a profit or when a loss is unavoidable. The introduction to trailing and stopping profits is made to reduce possible loss and its aim is to make trading using cryptocurrencies easier. To be successful at this, you need to know how to do it right.
Why Crypto Exchange/ Trading
Companies and other individuals trading on the crypto exchange market are in search of new ways to invest without the hassle that accompanies traditional investment methods. Besides, they are looking to make profit and keep their finances in a safe place and where better than in cryptocurrency! It is not only user friendly, but it also has up to date exit strategies. 3Commas cryptocurrency trading platform is the best option for traders who search a reliable way of getting a profit when trading in cryptocurrency stock exchange. In addition, these exits strategies are your best means.
Exit Strategy Features
The exit strategies come in terms of orders (an instruction issued to either sell or buy on the crypto market). You preset them as a trader as an exit strategy. They include trailing stop loss or taking profit.
What is the Order “Take Profit”
A market order on the higher side indicates that there is a rise in the value of the investment. If there is a preset price for selling the investment and the level is reached, then the take profit order closes in and makes the sale. The automatic process cashes in all of the profit made and continues monitoring the market for another possible sale. It redefines the risk and the reward that comes with trading on crypto markets.
What is the “Stop Loss” Order?
The order is dedicated to limiting the loss incurred if the exchange market prices dip, which can happen anytime. It stops further loss in the principal amount of invested by closing trading options on the market. It occurs once it reaches the preset price provided by stop loss limit order. The feature is essential to any trade or company as it prevents instances of company liquidation or bankruptcy.
These orders activate a specific price that is set to either sell or buy. They come in the form of trigger prices. They are set just below the final trading price for a limit order issued to make a buy and or high enough but not reaching the final market order issued with the intentions of making a sale.
What Is Trailing Stop Market Order?
Trailing stop orders are quite different in comparison with the normal stop order for either profits or loss. In this case, the order is designed to follow a specific path for a preset direction and distance i.e. it goes up a reset distance or goes down at another preset distance. It stops at a high market selling level, and makes a sale that brings in profits and stops at the preset level when the market dips stopping excessive loss. The TSL delivers you maximum profits as a trader without having to reach the vertical line of any trading coin on the crypto markets.
How to take the order Trailing Stop Loss (TSL)
Identify the Trailing Stop trailing distance, which indicates how much you are willing to lose or gain in a single trading occurrence. For example, if you have an investment of 6000 bitcoin USD, and have set USD 500 as loss or Profit realized during tradeoffs, then, the 500 USD makes up the trailing distance. The trailing stop then is the market trading prices moving up or down with 500 USD.
Let’s say that the trading prices move up by USD 600, then the principal amount readjusts to USD 6100 and the trailing stop loss remains USD 500. If there is a drop in the prices, then Trailing Stop losses order will take effect at USD 5500 meaning that you only lose USD 500.
Cryptocurrencies performance on the exchange market is pretty hard to predict and the trends differ each time. However, with the above strategies in place, it is evident that you make a profit and minimize the losses.
Eduard Watson Author
An experienced finance writer for more than 10 years, active industry watcher, and gadget enthusiast.