A stop-loss order shouldn't be placed at a random level. The ideal place for a stop-loss allows for some fluctuation but gets you out of your position if the price turns against you. One of the simplest methods for placing a stop-loss order when buying is to put it below a "swing low." A swing low occurs when the price falls and then bounces. It shows the price found support at that level. You want to trade in the direction of the trend. As you buy, the swing lows should be moving up.
The stop-limit order is the combination of stop price and the limit price.
The stop price is the price that will generate your limit order.
And limit price will be the actual price where your coins will be sold.
This shows that as soon as you stop price is reached, the limit order will be placed automatically.
How To Set A Stop Loss On Binance
Setting up a stop loss on Binance is very artless and easy. It is not technical or difficult to exercise.
In our example, we have bought 315.341 KNC coins with 500 USDT on Binance for 1.540 on a 4-hour chart.
We will now set up a stop loss on our KNC spot trade.
In this example, the red line is the 200 four hours moving average of KNC coin. Considering this moving average our main support, it is best to set up our stop loss below this red line. To set up a stop loss go to “sell” sections and select stop limit. On the above image, you can see the stop loss window. Our stop price is 1.465 that is below the main support of 4 hours, 200 moving average. Our limit price is 1.460 which is lower than our stop price. The limit price or the limit order is always the actual price where your coins are sold. As soon the market price will hit our stop price a limit order to sell 315.341 KNC will place immediately on the order book.
If our stop loss order is filled we will face 40 USDT loss on our 500 USDT trade. In placing a stop loss, a confirmation window always appear before placing actual order, read those statement carefully before placing your stop loss. The stop loss statement is so self-explanatory, that if the price of KNC coins drops to or below 1.465 and order to sell 315.341 coins will be placed for 1.460.
After reading the statement and clicking on “confirm” Binance will generate stop loss order. Your stop loss order will be shown in the section of the open order at the end of your trading page. Like advance exchanges, Binance will show a red line where your stop loss is placed with the necessary details.
One important thing that our readers must know is that Stop loss order is always placed on the exchange order book only when the stop price is reached. And your limit order will only be filled if the market price reaches your limit price. Sometimes market price reaches the stop price as a result limit order start showing in the order book, but the market price does not fall much to reach the limit price so in such case limit order will not be filled.
These types of orders are not always needed in crypto transactions; some transactions do not require a stop loss. An example of where the stop loss isn’t necessarily needed are cryptocurrencies with a higher market capitalisation that are less volatile due to their broad audience and trust in the market. This makes it less likely for its price to drop significantly or even to zero after some negativity in the market place.
However, there are some specific scenarios where stop-loss orders can be used such as when you want to control and sell out of a falling position and “limit” the amount of “loss” your take. Platforms like the deVere Crypto Exchange App, allow you to modify your stop-loss on the move quickly and efficiently and also give you the leverage of setting very low stop-loss orders and yet still allow you to change your stop loss should markets shift positively and quickly.
