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Trailing Stop, Take Profit, Or Trailing Take Profit – Which Order Type Is Better?

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By Author: Growlonix
Total Articles: 11
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Are you planning to invest in cryptocurrency? Or you have already started crypto trading, and looking for the right strategies to earn profits?
Crypto trading is time-consuming and profitable at the same time. Usually, novice traders invest 10-12 hours while monitoring the charts. But the expert traders use a set of advanced trading tools like Take Profit, Trailing take profit, bracket order, etc. to increase their chances of profit. Among these order types, activating take profit order as a part of your exit strategy will surely help you.

The expert traders usually place take profit orders to trade smartly and safely without monitoring the market 24 x 7. If you want to know about the working of this order type and its strategies, let’s understand what is take profit order?

Take Profit order
Take Profit is a type of limit order that specifies the exact price at which the trader should close out an open position in a trade for a profit. If the price of the crypto asset you are trading doesn’t reach the limit price set, the take profit order doesn’t get fulfilled.
This order type allows ...
... the trader to set a target profit price that ensures that he will make a profit on this trade. This order type allows the traders to maximize their profits. Generally, this order type specifies a certain price which is chosen by the trader above the buying price.

If the price of the crypto asset you are trading reaches to the limit, it will automatically trigger a sell order. It’s a kind of limit order where the trader can buy the crypto assets at a low price or sell them at a higher price.

Let’s understand how it works with an example:
Let’s say a trader bought 1 Ethereum (ETH) at $5,000, and put take profit +10% which means, you created an order to sell ETH at a price of $5500. For a while, ETH traded within $5000, and then continued to grow. Upon reaching $5500 and above, your pending order with take profit +10% will be filled, and the system will close the trade with a sell order.
Here your total profit comes out as $500.

Most often traders use this order type in combination with stop-loss order so as to limit their losses and maximize their profits.
Apart from choosing take profit order, traders can choose Trailing stop order like Trailing buy or Trailing stop sell orders. Let’s understand in brief about Trailing Stop order.

Trailing Stop
The idea behind Trailing stop order is quite simple. In this order type, a value either a percentage or fixed amount is set after a position has been entered into, typically as a stop loss order. And, when that value is reached through the price drop in cryptocurrency, the decision to sell that particular crypto asset is made automatically.

This order type only moves up which means that if the crypto asset price is rising, your stop order will trail behind it to the defined value and you will always keep those increasing profit.

Let’s understand it with an example:
Suppose a crypto trader is holding a long position of BTCUSD contracts at $10,000 and a trailing distance has been set at $500. Once the last traded price goes up, the Trailing Stop will move in the upward direction and will maintain the trailing distance of $500.

If the last traded price moves up to 10,600 USD, the Trailing Stop Price will automatically be adjusted to $10,100 and locks in the profit. This means that the Stop Loss will trigger only if the price drops by $500 from the highest price reached. However, if the price never went up the Trailing Stop will be triggered a $9,500 just like a normal Stop Loss.
Growlonix allows its traders to use Trailing Stop orders like Trailing Stop sell or Trailing Buy order, Trailing stop loss and more. This is the best crypto trading platform that offers trading bots to automate the take profit, Trailing stop and other strategies of the traders. Since these bots let traders place orders safely, the traders have to set the percentage of the profit which they need.

The Trailing buy stop order is placed at a fixed amount above the current market price. As the price of crypto asset falls, the trigger price is adjusted so that it is never more than a specified value or trail from the market price. If the price increases, the trigger price doesn’t adjust. And, the asset will be purchased at the best price. On the other side, Trailing Stop sell order is just reverse of this order type.
The other most popular strategy which traders can use to lock in their profits or increase their gain is Trailing Take Profit. Let’s understand it in deep:

Trailing take profit
This is one of the most popular and useful trading strategies in crypto trading. Its goal is to increase profits. When the Take profit value is reached, but the price moves further into the profit zone, the position will not close.

And, Trailing Take profit will continue to follow the price, and at the slightest movement back, it will close automatically with a larger percentage of profit than choosing simple take profit order. This order type is designed to lock in profits and limiting the losses of the trader.

If the trailing take profit moves up, then it will not move back. Thus, this is the most profitable order type that will prevent your losses.

Let’s understand how this order type works:

Imagine that you bought ETH for $10,000 and set a take profit order at $11,000, trailing take profit for 5%. If the Ethereum (ETH) price climbed to $10,500, the order is not executed as the point at $11000 has not been hit.
• If the ETH price climbed to $11000, a stop market order at $10450 would be placed.
• If the ETH price dropped to $10500, the stop-limit order is still at $10450
• If the ETH price climbed to $12000, the stop order jumps to $11400.
• If the ETH price falls to $11000, the stop-loss order at $11400 is executed.

As you can get, without the trailing take profit feature, you would earn less, missing the price at $11400, and your ETH would have been sold at $11000. Growlonix lets its traders place this order type automatically using a bot.

So, if you want to maximize your gains and reduce the possible amount of losses, you cannot avoid using advanced order types at Growlonix to earn profit. This is one of the top crypto trading platforms that provide the best signals to traders to earn profits.

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