Why Trading with Bracket Orders is the Most Profitable Approach in the Crypto World?
by Trailing Crypto cryptocurrency expertsThe prices for the cryptocurrencies
have shot up by more than 200-300% since their launch. There is substantial
volatility in the crypto world and that’s great news for the traders looking
for short-term profits. But the question is, how can one grab such an opportunity?
Here
are a few tips:
The first thing that you
need to understand while trading cryptocurrencies is the kind of risk it
involves and how can you limit it. if you place 10 trades and out of them 5
turn out wrong, you can still make more money with the remaining 5, than what
you have lost from the failed ones. Limiting risk is one of the best strategies
which is best done with bracket
orders available on the best crypto trading platforms like
TrailingCrypto.
Let’s understand about
bracket orders and how can these be used in upward and downward trends:
Bracket
orders
Bracket order is a type of
conditional order where you place a new trade along with an exit and stop-loss
order. Once your main order is executed successfully, the system places two
more orders namely the one for booking profit and a stop-loss order. This will
create a type of bracket of three orders.
And, whenever the take
profit or stop-loss order is executed, the trade will come to an end. This will
make the overall trading process automatic. A bracket order can be placed with
a market or limit order with a stop-loss and trigger price. Instead of placing
the normal stop-loss order, you can choose the trailing stop-loss order which
will move your stop-loss price up and down as per the market movement.
This is one of the best methods
used by crypto traders to manage their risks.
The best crypto trading exchanges like BitMEX also support bracket
orders with margin trading. This helps them to maximize gains while protecting
the losses. Not many exchanges offer you margin or leverage, so you need to own
the respective coin before selling. But on BitMEX platform which offers margin
trading, the trader can use the complete margin amount to trade a larger
quantity.
Why
you need to use bracket orders?
Imagine
a Scenario, where you are witnessing good volatility in the crypto market. Let’s
take the example of BTC. Say you see it going from $4400 to $4375 and $4450 in
a day. So you have an opportunity of earning $75.
In
a normal scenario, you will place a buy order at $4375 and wait for it to get
completed. Once it is completed, you can either place a stop loss order or can
place a Sell order. First thing is that you can’t place both sell order and
stop loss orders unless you use margin/leverage on it. Secondly, there are many
exchanges which don’t even give you trailing stop loss. They only give you an option
of setting a stop loss order. In such a case, the possibility of trading above the
target becomes quite tough and time-consuming, unless you are a full-time
trader.
And,
the answer to the above challenge is a simple Bracket order which is offered by
TrailingCrypto now on global exchanges.
So
if we look at the above example, here you can place a bracket with buy price of
$4375 and sell at $4450 with stop loss at $4350 and trail at $25. Now in
this case, let’s say your order was bought at $4375 and the price started to
move in a predictable direction.
If
it touches $4450, the sell order will be executed and profit will be booked.
However, in the opposite situation, say the price increased from $4375 until
$4425 but did not hit $4450 because the trailing stop loss value was at $25.
The stop loss will be executed at $4400 so even in this case the trader will be
able to make a profit of $25. Otherwise, this case would not have been
possible.
So,
using bracket order is invaluable in trading, as by employing multiple limit
orders not only you can mitigate the trading losses and guarantee profits, but
they can also protect the primary order. Here, if the primary order is filled,
but the value doesn’t reach either limit order, then the trade and its value
will be protected. And, if the primary order is not filled, and limit orders
will not be triggered, all this means that the trader will not be selling off
or buying the assets at a price which they do not want.
Apart
from this, the third-party crypto trading terminals like
TrailingCrypto is offering trading without needing to change the exchange or
move their funds anywhere.
Benefits of using bracket orders
By
bracketing a trade request with stop loss, trailing stop, and the target
profit, the traders can easily secure their earnings and protect themselves from
losses.
If
one of the pre-specified conditions is met, a request to quitting the position
will be sent automatically.
Let’s
understand some other benefits of bracket orders:
1.
Placing
a bracket order reduces the risks to unbearable losses with the predefined
stop-loss orders.
2.
These
orders allow traders to set the target profit value and stop-loss manually in
one single order
3.
Trailing
stop loss option is also available there so as to increase your gains whenever
the price moves in a favorable direction
4.
These
orders are automatic and gives complete protection to the traders
5.
Automatic
risk management is also offered
6.
It
offers maximum possible options available in any kind of order
Conclusion
Bracket
orders are the tools which should not be missed out by any trader as they not
only offer a degree of automation but these are the perfect ones to lock-in the
profits.
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Created on Aug 30th 2023 12:23. Viewed 108 times.