Trading cryptocurrencies have become one of the quickest ways to earn money. Whereas conventional methods like share market, investing in property, etc., take years to make you rich, crypto trading may turn the tables overnight. Crypto market is highly volatile and its volatility is appealing for many if the right strategy is used by traders to trade.
Crypto trading market is attracting many newbies as well as expert traders. Due to its increased popularity, there is also a spike in the development of trading platforms and apps. The trading platforms like Growlonix have made the whole trading process easily manageable and technical. Dealing with crypto assets is risky as well as profitable at the same time. While an investment can yield impressive returns, it’s important for the traders to be aware of the potential risks too.
There are numerous trading strategies and advanced tools used by traders to make the trading process easier. Automated trading is another popular method in crypto trading that is used by traders to maximize their earnings. Growlonix offers different trading strategies, trading bots, trading signals, and advanced order types/tools to its traders which allow traders to set a specific plan for executing trades. One such trading method used by traders is trail orders which allow traders to set the right strategy for significant market swings.
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What are Trail Orders?
Trail orders are the advanced orders which react to significant market changes. The order is triggered whenever the price of the asset reaches a maximum or minimum market price after the trail order is submitted. This trigger is actually the percentage set by the trader which determines the minimum amount of market price movement required for the order to be executed.
Whenever the trail order is triggered, the trading system will place an order automatically. One of the key benefits of using trail orders in crypto trading is that you can set a specific plan for executing trades. For example, you may believe that the overall market will remain bearish but the asset price will rebound later. In that case, the trader can go with the trail order to buy an asset whenever the market rebounding rate exceeds the preset callback rate and the market price of the asset exceeds the predefined trigger price.
Different types of trail orders popular among crypto traders are trailing take profit, trailing stops, trailing stop buy, trailing stop sell, etc.
Benefits of Using Trail Orders
- Automates trading
- Increased profits
- Increased flexibility
- Reduced market risks
Trail orders are valuable tools which automate the trading process and allow traders to take advantage of market price movements. These are the best tools that will let you manage risks while protecting profits and limiting losses.
If you are a pro trader, then your trade entries and exits might require a bit of extra touch to maximize the gains. In many cases, basic order types can cover most of your trade execution needs, but of course, for complex orders you need something advanced. And, there are a host of advanced order types which you may choose to earn better profits.
Let’s understandsome popular order types used by the traders:
Trailing Stop Order
Trailing stops are used by expert traders in their trading strategy to buy and sell assets. This order type allows traders to set a limit target or the moving stop price. The target price moves based on the price movement in the market.
In this order, the trader can sell the asset once its price reaches below the pre-specified price and the reverse is for the buy order. So, this trading strategy is used to buy or sell assets if they move in a direction which may seem unfavorable to the traders.
So, trailing Stop Order is designed to protect profits by enabling a position to remain open as long as the price is moving in the right direction, but closing the trade as soon as the price changes direction by a specified number or percentage. Growlonix allows its traders to place this order easily so as to buy or sell positions to protect profits. The trailing stop only moves if the price moves in a favorable direction.
Trailing stops only move in one direction as they are designed smartly to lock in profits while limiting losses. If a 5% trailing stop loss is added to a long position, a sell trade will be executed if the price drops 5% from its peak price after purchase. The trailing stop only moves up once a new peak has been achieved due to market price movement. Once the trailing stop has moved up, it cannot move back down.
Trailing stop orders provides traders with the best and most efficient ways to manage risks. Most of the traders use these orders as a part of their exit strategy. Actually, this is the most basic technique used for an appropriate exit point in crypto trading which further maintains the stop-loss order at a precise percentage just above or below the market price. In volatile crypto trading markets, the advanced order types are quite useful in limiting the potential losses of the traders.
Let’s understand about Trailing stop order for buying an asset:
Trailing Stop Buy Order
Utilizing a buy strategy allows traders to trigger an order whenever the market turns around from its low, increasing your odds to buy an asset at a profitable price. Let’s understand it with an example:
Suppose you have 32,000 USDT in your account and you would like to buy Bitcoin at the best possible price. Knowing that the current price of 1 BTC is 30,000 USDT, you are placing a Trailing Buy order at a 10% Price Difference.
In this particular example of a Trailing buy order, when the BTC price decreases to X USDT, the Buy price will be recalculated at X + 10%. However, if the price for 1 BTC goes up, the Buy Price will remain at its latest value (X + 10%). The order will be fulfilled when the latest buying price matches the current BTC price.
Here if the price of BTC reaches 27000 USDT, the trailing stop buy order will be executed. And, a market buy order will be triggered.
Another order type that pro traders use to increase their gains whenever the price of asset moves in a favorable direction is Trailing Take Profit. Let’s understand what this order type is:
Trailing Take Profit
Now, traders can also take advantage of Trailing Take Profit (TTP) orders on the platform to get the most from their investments. This is a kind of take profit order that is converted to a trailing order once the trigger price is reached. This order allows the trade to remain open and continue to earn profits as long as the price is moving in the favor of the trader.
If the price changes direction and this change surpass the previously set percentage, the order will be executed as the market order. The traders can use trailing orders for both buy and sell orders. TTP order is used to help traders capture more profits from their trades.
Trailing take profits are quite similar to trailing stops in many ways and are used largely in crypto trading. And, the difference is quite simple:
The main difference between TTP and trailing stop orders is that the TTP order takes the profit in any case. Thus, they reduce the risks that might have occurred if you would be considering Trailing stop alone. On the other hand, a trailing stop order is a type of stop loss order which automatically moves in the same direction in which the asset price is moving. Trailing take profit order moves in one direction and is designed to lock in profits, while reducing/limiting the losses. This order is actually bound to the maximum of Take Profit instead of just increasing or decreasing the prices.
Growlonix is one of the best crypto trading platforms that allow its traders to test and automate their trading strategy. Make sure to choose the right strategy and the platform will automate your trade. Here you can also make use of trading bots which monitor the market 24×7 and place trades accordingly as well as automatically.
In the long strategy, TTP moves up once the price of the asset has surpassed the previous highs and a new high is established then. And, once it moves up, it cannot move back. Thus, it makes sure to secure profits and prevent losses. This is an advanced order type which allows the trade to remain open and continues to earn profit as soon as the price is moving the trader’s favor. If the price of the asset changes direction and it exceeds the previously set percentage, the order will be closed automatically.
How to Place a Trailing Take Profit Order?
- Make sure you are in the trade view
- Choose your trading pair ( say, BTC-USDT)
- Select Take Profit Market order
- Enter order details (like Trigger price, amount, etc.)
- Select the Trailing Take Profit checkbox
- Enter price deviation percentage
- Review and confirm your order