Limit Order with Take Profit and Stop Loss is an advanced tool used to protect profits and limit losses automatically. I will explain it in detail:
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1. The concept of Take Profit and Stop Loss:
Take Profit: Allows you to set a sell price higher than the current price to secure profits when the price reaches that level.
Stop Loss: Helps you reduce losses by selling the asset if it drops to a certain price.
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2. The boxes I found:
(1) Profit taking request:
Required limit (USDT):
Here you specify the price at which you want to sell the asset to make a profit.
For example: If you bought a currency for $10 and want to sell it when its price reaches $15 to make a profit, you put $15 in this box.
(2) Stop Loss Request:
It contains two columns:
1. Activation (USDT):
It is the price at which a sell order is "activated" to minimize losses.
Example: If you buy a currency at $10, and you want to stop loss at $8, you write $8 here.
2. Limit (USDT):
It is the price at which you want to execute the sale after activation.
It should be slightly lower than the "trigger" price to ensure that the order will be executed even if the price drops quickly.
Example: If the “trigger” is $8, the sell limit can be placed at $7.95.
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3. How does the feature work?
When the price reaches the trigger price (in the stop loss), an automatic sell order is created at the price you set in the limit box.
When the price reaches the take profit price, the sale is automatically executed to take profit.
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4. Practical example (for beginners):
Scenario:
I bought a coin at 10 USDT.
You want:
Take profit at 15 USDT.
Stop loss if the price drops to 8 USDT.
Preparing the application:
1. In the Take Profit order box:
Limit price = 15 USDT.
2. In the Stop Loss order box:
Activation = 8 USDT.
Limit = 7.95 USDT.
Result:
If the price rises to 15 USDT, the coin will be sold to make a profit.
If the price drops to 8 USDT, a sell order will be triggered to limit losses at 7.95 USDT.
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5. Important tips:
The stop loss trigger price must be slightly higher than the limit price to ensure the order is executed.
Use this feature on highly liquid currencies to avoid price gaps.
Make sure to follow the market, as orders may not be executed if there is extreme volatility.