🌈Trailing Stop Loss

1. How Trailing Stop Loss Works:

Trailing stop is a more advanced function of stop loss setting. The stop loss price will increase as the token price rises, aiming to reduce losses . Suppose the token has experienced a surge, but the surge is not enough to trigger the take profit price you set. If the trailing stop is not turned on, the order will only be closed when the price drops to the stop loss price, and you will face a turn from profit to loss; but if the trailing stop is turned on, you may be in a profitable state when the stop loss order is closed.

Example: The user sets the take-profit ratio to +200% (i.e., a 3-fold increase), and the stop-loss ratio to -40%. After the order is opened, the maximum increase of the token is +190%, and then it starts to fall and never recovers:

• Without a trailing stop, the order will not be automatically sold until the token drops to -40% again, which means that the user will miss out on gains and end up suffering losses instead.

• If the trailing stop is turned on, the order will continuously adjust the stop loss price every time the token rises. When the token rises to the maximum value of +190%, the order will adjust the stop loss price from -40% to +74%. By adjusting the stop loss price, the token is given enough room for maneuver while ensuring profits when the token actually falls.

After opening the trailing stop loss, the stop loss price will maintain a fixed stop loss ratio with the highest price:

Stop loss price = Highest price * (1 - drawdown percentage%) = 290% * (1 - 40%) - 1 = 290% * 0.6 -1 = 74%

2. Please note when using trailing stop loss:

• The trailing stop will continuously adjust the stop price. As long as the token price keeps rising, your stop price will rise accordingly . Therefore, the trailing stop will only keep rising and cannot be lowered.

• There is no activation price for trailing stop loss. When an order is created, the trailing stop loss will start immediately.

• Trailing stop loss will not adjust your take profit price, so when you turn on trailing stop profit and trailing stop loss at the same time, and the drawdown percentage of the trailing stop profit you set is greater than the stop loss percentage, the stop loss price will be higher than the take profit price.

• If both trailing take profit and stop loss are enabled at the same time, and the price reaches the take profit price, the order will be closed when the actual price decline reaches the smaller value between the take profit drawdown and the stop loss ratio.

3. The difference between trailing take profit and trailing stop loss:

Click to view - What is trailing take profit

• Different applicable scenarios:

  • Trailing Take Profit: The goal is to maximize your profit as much as possible

  • Trailing Stop: The goal is to minimize your losses

• Is there a trigger price?

  • Trailing Take Profit: Yes, the trigger price is the take profit price you set

  • Trailing Stop: None

Click to view - How to enable trailing stop loss