Modern-day crypto trading is nothing without Stop Loss and Limit Order features. Here is your chance to know these tools and learn their usage.
Although crypto trading is a game of calculated risk, I strongly believe you started or should start with the aim of being successful in the long run. At this junction, it is safe to say you already have a broker choice.
If you don’t have one yet, try Binance. I wrote a piece on everything you need to navigate the Binance platform perfectly. Check it out here before proceeding with this article.
However, if you’ve already made your choice, I would like to show you how to utilise Stop Loss, Stop Limit or Limit Order, and more on Binance. The rule is the same for all brokers, but you might need to check out my ‘Binance beginner guide’. Not just for familiarity’s sake but because it is the best broker in the world.
Worthy mentions: Coinbase, Luno.
Let’s get to business!
It should no longer be news that I use Binance for my trades. This is because it offers the lowest charge in terms of trading fees, designed to integrate both newbies and advanced enthusiasts, and there is also an option to trade with BNB coin.
Lastly, it has most of the altcoins you want to trade against. If you don’t have a Binance account yet, follow the simple steps in this article.
Because Binance does not give room for a direct-fiat transaction, you are expected to purchase BTC, ETH, or any coin of your choice from networks like Coinbase, Luno, and more. Once that is settled, transfer your crypto to your Binance account as with your crypto casino account.
N.B: My choice of altcoin for this tutorial is LTC.
- Initiating the BUY Order
This is as straightforward as it gets. The ‘Buy’ operation means you have decided to buy crypto at a given price. The price may be above, less, or the same as the coin’s current price. The main point is you will only receive this token once your price is met.
For example, if you are interested in placing an order to BUY LTC, you must enter the amount of BTC you wish to use in operation.
LTC sits at 0.00390373 BTC at the time of writing this article. Hence, I might want to buy mine at 0.0038 BTC.
This means I’ll only receive the altcoin token in my wallet once the price matches my price.
- How Volume Segmentation comes into play
Volume segmentations generally come in 25%, 50%, 75%, and 100%. The same rule applies to Binance.
This means your decision determines the amount of BTC you will use to purchase LTC. Once you tap on any segmentations, the price automatically reflects the amount of BTC involved in the order, just like when you choose the amount to deposit during crypto gambling.
- Initiating the SELL Order
Using the BUY operation means all your actions focus on setting a SELL target. The only difference is that one is usually driven by profit when making a SELL demand.
This means that if 0.00390373 is the current price of LTC, you might want to sell at a higher price (maybe 0.00420000 or even more). Once the token attains this value, it is sold automatically.
However, this might not be the case especially if you’re selling a huge volume. A buyer who anticipates price movement might just buy. Not waiting for the price to increase.
- Using Stop Limit and Stop Loss
Every professional trader is expected to use these functions. It might be confusing for beginners, but if you follow me until the end, you should understand how they work and how to use them. The Stop Limit/ Limit Order and Stop Loss provide extra leverage when buying and selling coins.
Activating an order with Stop Limit
Stop Limit lets you decide on a favourable price for buying or selling operations.
If your stop limit for buying is 60 when the current value of LTC is 55, only trade within your condition will be endorsed.
The same goes for selling at the rate of 60 when the actual price of the altcoin is 55.
It is not your problem to be worried about getting buyers or sellers. They will come as long as there are traders who buy at a price lower than your buy price and the ones who are willing to buy at your price because it appears reasonable compared to the actual price.
Activating an order with Stop Loss
Stop loss is that feature that limits your loss during an active trade.
Suppose you approach the market with a signal to buy LTC at 55-65. Which means you anticipated a price increase. However, a continuous drop ensued instead of the price moving in your favour. Once the price drops to 50, the order automatically stops. In other words, it means your stop loss was set at 50.
Trading is fun if you know how to navigate the market with these amazing features. Until next time, feel free to reach out if you need further assistance trading on Binance.