What is a Stop Loss?
Stop losses or stop orders are used to enter a position when the price breaks above or below a certain level (the Stop price). Stop orders are available on the Exchange Platform (with Advanced features enabled) and the Margin Platform.
For example, if the price for QNT is currently 106 and you want to buy as soon as the price gets to 105, you can place a Stop Buy order with a stop price of 105.
Similarly, if you placed a Stop Sell order with a stop price of 107, you would sell once the price rises to 107. These are typically used to enter "breakout" trades when the price breaks through a key support or resistance level.
What is Take Profit?
Take Profit (TP) can be set up by simply using a Limit Order at the price you wish to sell your asset to gain a profit. They are available on the Margin Platform.
For example, if you bought QNT at 100 EUR and would like to sell it once the price reaches 110 EUR, you would set a Limit Order to sell my QNT at the 1110 EUR mark. This offers an offhand approach to setting a Stop Loss because it is always good to have a figure in mind on when you would like to exit if the price starts dropping. The order will be visible in the order books from the start and other traders will see that you are buying QNT at the 110 EUR mark.
How to Set a Take Profit
First, head to the Margin platform and find your open position. Click on "Edit", then "Change TP/SL".
Here you will be able to set a Stop Loss or Take Profit.
- Stop Loss (SL) - Set at a price at which the order automatically closes, when the price of the investment reaches a specified lower price.
- Take Profit (TP) - Set at a price at which the order automatically closes, when the price of the investment reaches a specified upper price.
- In Margin Trading a new limit or stop order will always open a new position, even if you have an existing open position for the same pair. It's possible to be both long and short in the same pair at the same time in margin trading.
- In Margin Trading, the take profit and stop loss are specified in the opening order or subsequently added to the open position.