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Take Profit and Stop Loss Orders With 3Commas
It’s vital to remember that no one can accurately predict future market behavior when trading on cryptocurrency markets. For this reason, it is important to take profits as prices rises and ensure you capture value in the case of a sudden drop in an asset’s price.
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In today’s article, we will talk about the Take Profit and Stop Loss orders, which are available in the Smart Trade smart terminal by 3Commas. We will examine the features of these instruments and share the ways to benefit from these tools.
Safety orders are an indispensable trading tool that allow you to automate the trading process and make it easier to use. Safety orders help minimize losses in case of unexpected price movement or fix profits when the price reaches a pre-set target level. Safety orders, such as stop loss and take profit, are complex order types.
Trading without safety orders is a popular strategy among beginners. This approach deprives inexperienced users of the opportunity to maximize profits when the price reaches specified levels and removes any protection in the event of a sharp price drop. To trade effectively, it is necessary to master these tools by applying them to your trading strategy.
Stop Loss is an order allowing you to automatically close a deal when an asset’s price falls to a specified level. Such orders have the following logic: if the price falls to or below the specified level, an order to close the position will be placed at the specified price. This type of order is used to minimize losses together with market or pending orders.
Take profit is an order allowing you to automatically capture profits when the price reaches a specified level. Such orders have the following logic: if the price reaches or moves above the specified level, an order to close the position will be placed at the specified price. This type of ordersis used for timely profit-taking in conjunction with market or pending orders.
The joint use of these orders is an optimal trading strategy. With the right strategy chosen and followed, traders can utilize the volatility of the cryptocurrency market to maximize profits.
Also, safety orders can be used for trading on short timeframes or inside trading patterns. When trading cryptocurrencies, it is worth considering the specifics of the price movements of different coins. For example, when placing a stop loss, it’s necessary to take into account sharp price movements of assets by placing stop orders below support or resistance levels.
Using orders in Smart Trade terminal
The Smart Trade terminal by 3Commas offers users a wide range of tools for efficient manual trading on the cryptocurrency market. To start using the terminal and professional trading tools, head to “Smart Trade”.
There are different types of orders available in the terminal which can be used depending on your skills and trading strategy. First, select an exchange account and a trading pair from the list; next, you need to select the mode for manual trading. Modes available to users include:
- Buy/Sell to use simple limit orders
- Smart Trade for buying and planning to sell
- Smart Sell to sell existing assets
- Smart Buy opposite of Smart Sell for traders utilizing short positions
- Smart Cover to place conditions to buy and sell coins simultaneously
Setting Take Profit
When setting take profit orders you need to select the type of order to be placed: limit order or market order. In the first case, the order will be filled exclusively at the set price; in the second case the position will be filled at the market price.
Next, it is necessary to specify the price of order execution at which the position will be closed. It should be noted that several price tracking methods are available when selecting a market order:
- Bid – tracks the price of the first buy order in the order book
- Ask – tracks the price of the first sell order in the order book
- Last – tracks the price of the last trade on the order book
Additional functions are:
- Trailing Take Profit order
Trailing take profit orders can only be used on supported exchanges. When this tool is used and the target profit level is reached, it will start tracking the price behavior by following it with the specified deviation. Activation of trailing take profit allows you to maximize profits in case of a further price movement above the specified profit level. For more information on the application of this tool, please follow this link.
- Step Sell
Allows you to close a position gradually at specified target levels. You can learn more about using this feature in this section.
Setting a Stop Loss
When setting a stop loss, similar to take profit, you need to select the type of order being placed, the price tracking method for closing the position, and indicate the closing price.
Additional functions when using stop loss are:
- Stop Loss timeout
This option allows you to set the time to activate a sell order. The system will check the price after a specified number of minutes. If the price appears to be higher than the stop loss is set, the trade will remain open, otherwise the position will be closed.
- Trailing Stop Loss
Similar to the trailing take profit order, trailing stop loss will follow the price of the asset with a specified deviation. If the price falls and crosses the specified level, the trade will be closed. More information about this option can be found in this section.
In this updated article, we've explored the significance of utilizing Take Profit and Stop Loss orders with 3Commas in 2023. These tools remain indispensable in the ever-volatile cryptocurrency market. While we cannot accurately foresee market behavior, these orders empower traders to safeguard their investments and maximize returns.
Safety orders, such as Stop Loss and Take Profit, are complex yet essential tools for traders of all levels. Neglecting them, as some beginners do, can expose traders to unnecessary risks. To trade effectively, one must master these tools and incorporate them into their strategy.
A Stop Loss order automatically closes a position when an asset's price falls to a predetermined level, minimizing losses. On the other hand, a Take Profit order locks in profits when the price reaches a specified level. Employing both orders together creates an optimal trading strategy, capitalizing on cryptocurrency market volatility.
Furthermore, safety orders can be applied to short timeframes and within trading patterns, tailoring them to specific assets and their price movements. Placing Stop Loss orders below support or resistance levels, for instance, requires a deep understanding of an asset's behavior.
3Commas' Smart Trade terminal offers traders a comprehensive set of tools for manual cryptocurrency trading. With options like Buy/Sell, Smart Trade, Smart Sell, Smart Buy, and Smart Cover, traders can choose the mode that aligns with their skills and trading strategy.
When setting Take Profit orders, traders have the flexibility to choose between limit and market orders. The former ensures execution at the specified price, while the latter gets executed at the prevailing market price. Additionally, various price tracking methods, such as Bid, Ask, and Last, provide traders with precision and control over their trades.
The article also highlights advanced functions like Trailing Take Profit and Step Sell. Trailing Take Profit tracks price movements with a specified deviation, maximizing profits in case of further price swings. Step Sell allows gradual position closure at preset target levels, optimizing profit-taking.
Setting a Stop Loss is equally crucial. Traders must select the order type, price tracking method, and closing price. Advanced features include Stop Loss timeout, enabling the activation of a sell order after a specified time, and Trailing Stop Loss, which follows the asset's price with a specified deviation.
In conclusion, safety orders remain a cornerstone of successful cryptocurrency trading. The 3Commas platform offers a comprehensive toolkit to automate trading strategies. Leveraging safety orders not only shields traders from unexpected market fluctuations but also enables them to capitalize on price movements. By minimizing risks and optimizing trading opportunities, safety orders play a vital role in the quest for profitable cryptocurrency trading in 2023.