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What is an example of a trailing stop limit sell order in the context of cryptocurrency trading?

KlimpiApr 16, 2021 · 4 years ago1 answers

Can you provide a detailed example of how a trailing stop limit sell order works in the context of cryptocurrency trading? Please explain the process step by step and provide an example with specific numbers.

1 answers

  • sagame168th sagameApr 11, 2021 · 4 years ago
    Certainly! Let me give you an example of how a trailing stop limit sell order can be used in cryptocurrency trading. Let's say you bought Ripple at $1.00 and you want to protect your investment in case the price starts to decline. You decide to set a trailing stop limit sell order with a trailing percentage of 4% and a limit percentage of 2%. If the price of Ripple reaches $1.20, the stop price would be automatically adjusted to $1.15 (4% below the highest price). Now, let's say the price starts to drop and reaches $1.10. At this point, a sell order would be triggered. However, the sell order would only be executed if the price goes back up to $1.12 or higher (2% above the lowest price). This way, you can protect your investment if the price continues to rise, but also have a safety net if the price starts to fall. It's a useful strategy for managing risk and maximizing profits in cryptocurrency trading.

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