How to determine the profit and loss price when selling (example currency $1000SATS as shown in the attached image.
Imagine you decided to sell a currency of 1000 SATS that you have. The goal is to sell it at a good price and make a profit, while also protecting yourself from a significant loss if the price moves against your expectations.
What is 'taking profit'?
It is the price that you wish the price of 1000 SATS will reach after you sell. When the price reaches this number, it means you have achieved the profit you want, and the platform will automatically close the sale and put the profit in your account. It’s like saying: 'I am happy with this profit, I will stop selling here.'
Example for taking profit:
In the attached image, the selling price you chose is 0.0000490 USDT for each 1000 SATS. To take profit, you need to expect that the price of 1000 SATS will drop after you sell. You might set the profit-taking price at 0.0000485 USDT. This way, if the price drops to this number, you will gain the difference.
What is 'stop loss'?
It is the price that if the price reaches after you sell, you will stop selling and exit the trade with a small loss instead of losing more. It’s like saying: 'If the price rises more than this, I will stop so I don’t lose more.'
Example for stop loss:
Similarly, the selling price you chose is 0.0000490 USDT. To protect yourself from a loss if the price suddenly rises $1000SATS , you might set the stop loss price at 0.0000495 USDT. This way, if the price rises to this number, the platform will automatically buy and stop your loss at this limit.
A simple way to remember it:
* When selling: The profit-taking price must be lower than the selling price you chose.
* When selling: The stop loss price must be higher than the selling price you chose.
I hope the explanation is clearer and easier for beginners!
