Crypto Academy

How to configure a take profit trade

How to configure a take profit trade

5 min reading

Already know what the take profit order is? Then, discover how to configure it on bi4you!

Take profit trade

How to configure a take profit trade

Introduction

Cryptocurrency trading is always highly risky. Of course, investors pursuing long-term investing strategies are rarely concerned with current market swings. They are focused on the crypto market’s unstoppable rise and are certain of profits at the end of the planned investment cycle. Short-term upside and negative changes may cause a lot of difficulties for people who indulge in speculative trading. Losses and lost earnings are equally important to them. In this article, we will discuss how a take profit order may help with cryptocurrency trading and how to set one up on bit4you.

What is a take profit and why is it needed?

Take Profit orders to play an important role in cryptocurrency trading. Traders use them in different markets with a wide range of assets. When prices climb, orders ensure that assets are sold before values fall again. In other words, when a predefined price level is achieved, a Take Profit order automatically finishes a transaction, selling the assets.

Many traders and investors frequently leave a trade earlier than the circumstances require. As a result, they lose a share of their profit or do not take their profit on time, seeing it progressively shrink as the market enters a correction or a trend reversal. No one knows if the price will continue to grow over this critical level. By setting take profit orders, you will always collect a profit on time, protecting your deposit from avoidable risks. A take profit order allows you to automatically cancel a transaction when the price hits a certain threshold. Set take profit orders both when initiating a new trade and on an existing position.

How to configure take profit on bit4you

The setting of take profit orders is very easy on the bit4you trading platform. If you have not registered on the website, then it is high time to do so. After you’ve logged in, proceed to the Positions menu. In this section, you will see all of your acquired assets, how much you invested in each asset, its current price, and your profit from each deal. Then, from your list, select the asset for which you wish to set a take profit order. After that, you will be asked to enable take profit. By the way, there you can discover more information about TP by being redirected to the educational article

Set a percentage of your TP on the position page. “Take profit” triggers the selling of the position when it had reached some percentage of your profit. Let us illustrate it in the following example. At the current price of $36,000 per bitcoin, we expect a price increase to $40,000. Then, we set a take profit at the mark before this level, i.e. $39500 per coin. As soon as the price hits this value, our transaction will be closed. 

Furthermore, there you can also set a Trailing Take Profit order. Trailing Take Profit (TTP) is a profit-maximizing order that changes dynamically. TTP works best when there is a significant uncorrected price movement in the right direction. To enable the TTP action, click the Trailing take profit button and enter the percentage value of the price trailing corridor. Please keep in mind that if you select several Take Profit orders, TTP will only work for the final Take Profit goal.

Imagine we purchased a BTC for USDT. We set a stop-loss of 10,000 USDT and a 5-percentage-point trailing stop-loss. This implies that when the price hits the amount of 10,000 USDT, Trailing TP is triggered, and the transaction will have a trailing SL at 9,500 USDT, which will follow the price at a 500 USDT distance. As a result, if the price of BTC climbs to 10,200 USDT, the Stop Loss will rise with it to 9,700 USDT. 

In conclusion, TP orders assist you in trading with a cold head.  When you initiate a trade, determine a price to exit rationally, rather than succumbing to emotion and selling assets too soon or too late. The instrument of risk management also relieves traders of the need to monitor the market situation. Although a take-profit order assures a profit, it is very feasible that the order will be executed and prices will increase further. As a result, you may miss out on larger gains. Nevertheless, human error is also possible. Therefore constantly double-check the exact settings to avoid costly mistakes.

Conclusions

Leave a Reply

Your email address will not be published.