Manage your crypto trades using Take Profit order
by Trailing Crypto cryptocurrency expertsTrading cryptocurrencies
involves some kind of risk, making it important for traders to use different
kind of tools to control risks while securing profits. People invest in
cryptocurrencies for several reasons, and want to earn profits from their
investments. Since crypto trading market is highly-volatile, determining how to
buy and sell cryptos for a profit could be challenging for the traders. Before
investing in cryptocurrencies, it’s better for a trader to review how to take
profits out from this.
Take profit strategy helps
traders to learn when to sell the crypto to maximize gains. Selling your crypto
assets to lock in profits seems really easy to understand theoretically but tougher
to practice in reality. Learning when to take profits out is important! Why?
Let’s understand this with an example:
Suppose you buy a coin, and
it goes up and up, hitting your target price. You are happy now, but not
decided to sell it- while thinking, why you should stop at this profit when it
looks like it will go further higher in a day or two.
But you wake up in the
morning, suddenly checking the charts, and feel like you have been dumped. Why?
Because the trend had reversed while you were sleeping, turning your gains into
-4% losses.
Here is when considering take profit order can help you out!
Take
Profit order
Take profit order is one of
the most popular and important risk management tools used by professional
traders on regular basis. This is actually an automatic exit strategy based on
the trader’s profits and loss calculation. Placing a take profit order requires
some analysis and market research about the market moments.
In crypto trading, Take
profit order mentions the specific price at which a trader should close an open
position for a profit. Most of the crypto traders utilize this order strategy
combined with stop loss orders so as to manage their open positions.
In this order type, usually
the trader chooses a take profit value as the appropriate amount in case the
trade moves in his favor. And, if that particular profit level is reached or
once the take profit order is triggered, the trade will be closed
automatically.
Take profit order is a kind
of pending order that locks in the trader’s profit automatically and lets
traders earn immediate profits.This strategy works well for traders with
short-term strategy who wants to enjoy the benefits of a sudden rise in the
price of assets.
Example:
Suppose
a trader buys a BTC at $10,000, and puts take profit value as +10% which means,
then he has created an order to sell BTC at a price of $11,000.
For
some time, the BTC has traded within the range of $10,000, and then it continued
to grow. Upon reaching the value of $11,000 or above, your pending order
with take profit +10% will be fulfilled, and the system will close the trade as
a sell order.
In
this case, the total profit value comes out as $1000.
How
can I place take profit order?
The traders can place these
orders via automatic crypto trading platforms like TrailingCrypto. Such
platforms automate the profit targets and stop losses of the trader. Making use
of crypto trading bots from these platforms is an additional benefit. These bots
help traders to manage their positions in the best possible ways. The traders
can even customize their trading strategy via these platforms.
Take profit order is
designed to manage the risks whenever the system will stop the bot and sell the
order as per the preset conditions. Once the bot reaches the specified
percentage set by you within the take profit parameters, it will stop trading
by selling the asset at the best price.
To activate the take profit
order, traders are required to set the TP percentage. Considering the
risk/reward ratio is also important. To execute this order, traders need an
open position.
Example:
Suppose, you have an active
bot set on the crypto trading platform which is trading on BTC/USDT, and you
set the Take profit percentage
at 10%. As soon as the current price of the BTC(In USDT) becomes +10%, the bot
will close all the orders automatically, and sell the remaining BTC.
Why
should one choose take profit order as their trading strategy?
While
no one can predict precisely which trades will work well in crypto market,considering
take profit order as your trading strategy can let you earn profits via making
use of trading bots at the best trading platforms. The key advantage of take
profit orders is that the trader is not required to execute any kind of trades
here manually. This order type is executed at the best available price in the
market as per your preset conditions. This order type minimizes risks and
maximizes your chances of earning profits.
While
setting this order type, it’s important for the trader to consider risk to
reward ratio which will show how much profit the trader expects on any
exchange. The best trading platforms
like TrailingCrypto allows traders to test and automate their trading
strategies. These platforms have their own trading bots that watches the market
24x7 and place trades automatically on behalf of the trader.
However, Take Profit orders
are a short-term strategy that ensures the traders can reach some
profit level quickly. These orders aren’t suitable for traders with long-term
strategy who’d like to endure more ups and downs in the market in order to make
more profits.
Conclusion
By placing the take-profit
order, the trader doesn't have to worry about diligently tracking the crypto market
throughout the day. Just set the take profit level, and the assets will be sold
automatically. Choosing when to take out
crypto profits is important. Make sure to choose the take profit strategy
wisely to earn profits while minimizing the risks level.
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Created on Mar 22nd 2023 11:09. Viewed 70 times.