Today we will discuss a tool that traders often complain about missing on stock exchanges – Stop Loss rolling. In addition, we will mention a very important function, which we will describe in detail in the next lesson.
Rolling Stop Loss is a tool that gives the possibility of a much more comprehensive care for the security of our capital, while allowing for greater profits. This type of order starts from the moment it is set and moves with the increase or decrease of the rate.
On the platform we have two types of Stop Loss walking (Trailing SL). The first is for sale and the second is for purchase.
Below we present how they work.
Wanting to limit any losses when we suspect that course it may go down, we should set Stop Loss (SL). Let’s see what we get with the SL version, e.g. on the BTCUSD currency pair.
Current price BTC: $ 7,000
We set a stop loss 1.5% below the current exchange rate.
The situation is as follows: The rate approaches $ 7250 and then drops to $ 6400.
Let’s compare the effects:
- Selling price with ordinary SL: 6895 $
- Selling price with moving SL: $ 7,141.25
- The difference is $ 246.75
SL rolling is very easy to use:
In the panel Market we choose the option Trailing SL. Then fill the field on the Sell / Sell side (on the right) Activation entering a percentage of the current rate, after which the order will be activated. In our case it was 1.5%. In the second field with the description Limit enter the maximum acceptable decrease in percentage terms at which the sale will take place. For example, 3%. All we have to do is give the number of digital coins we want to issue.
With this version of Stop Loss we can additionally gain if the rate increases. Standard SL does not offer this.
Now we will present what this function gives when we intend to buy kryptowaluty. If we are determined to be specific digital coin and we want to buy it at the current price, we will use a Market order. However, the use of a Walking Purchase (Trailing SL) in the event of a drop in price will allow us to make a purchase at a better price than the current one.
In the previous example, BTCUSD we sold bitcoiny at $ 7,141.25.
So we want to buy BTC cheaper. If the rate is again $ 7,000, we can do it immediately with a Market order at this price or set a Rolling Purchase, which will cause the purchase of BTC after bouncing the price up, e.g. by 0.5%. Then we risk buying $ 35 more expensive, but we can also gain a lot if the price does not go up immediately but drops first.
We remember with Example 1that the price dropped to $ 6,500, i.e. if it was a sharp drop we could then buy BTC for $ 6,532.50. We must take into account that the price rarely falls so rapidly without bouncing on different intervals by more than 0.5%.
It will be helpful here to move this Stop Loss cursor on the chart, because the orders placed by SkyRocket are visible on it.
Now we set the rolling purchase order.
In the panel Market press Trailing SL. Then fill the field on the Buy / Buy side (on the left) Activation by entering the percentage after the increase followed by a purchase (in our case, 0.5%). In the second field with the description Limit enter the amount of interest to buy. For example, we entered 1.5%. All that remains is to provide us with how many digital coins we want to buy.
Remember: there are no best percentages recommended for duplication in the tool. They depend on many factors, e.g. the pair we play, the market situation, volume and many others. That is why it is worth trying various combinations and modifying them from time to time.
Finally, we want to introduce one more useful function that can allow you to get more profits. In the world crypto there are cases of a sharp drop in the price of some assets (even by several dozen%) and a quick return to the price before the fall. We will not dwell here on the possible reasons for such situations, just the fact that they happen. It is difficult to predict on what digital asset such a situation will occur. That is why at SkyRocket we give the opportunity to place orders for up to several dozen different coins from the same capital. But that’s the story for the next lesson.
Test for free at skyrocket.trade.
All you have to do is select the “register new account” option and enter your email address and password. Then click on the activation link that will come to the e-mail address given earlier and log in to the newly created account. You can learn more about the operation and use of the platform from the free SkyRocket service course available here: SkyRocket.