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Bitcoin Stop Loss Order Setting Summary: Points to Remember When Setting Bitcoin Stop Losses

The key to setting stop losses in Bitcoin trading is not to set too tight or too far and not exactly on the support/resistance levels.A few pips just below support or above the resistance levels are the best place to set stop loss orders.

If you're going long (buying BTC USD Crypto pair), just look for a nearby support level that is below your trade entry point and put this stop loss order about 20000 to 30000 points - which is about $20 to $30 (1,000 point movement in Bitcoin price is equal to $1), below that support level. The example illustration revealed below illustrates the level where a btc/usd trader can set up their stop losses on the Bitcoin price chart just below the support zone.

Stop Loss Bitcoin Order Setting - Stop Loss Order Setting: Points to Remember When Setting Stop Loss Orders

Support Level for Setting Stop Loss Level for a Buy Trade on BTCUSD Chart

If you're going short (selling BTC USD ==22==CryptoCryptoCurrency pair), just look for a nearby resistance level which is above your entry point & set this order about 20000 to 30000 points - which is about $20 to $30 (1,000 point movement in Bitcoin price is equivalent to $1), above that resistance level. The example illustration revealed below shows the level where a trader can set up their stop loss order just above the resistance level on a Bitcoin trading chart.

Bitcoin Stop Loss Order Setting - Methods of Setting Bitcoin Stop Losses - Bitcoin Stop Loss Bitcoin Order Placement

Resistance Level for Setting Stop Loss Level for Sell Trade on BTCUSD Chart

You also can use stop orders to lock in trading profits, Not for just Preventing Losses

The advantage of a stop loss order is that you don't have to monitor the market on a daily basis how the price chart is performing. This is especially handy when you're in a situation which stops you from monitoring your open trades for an extended period of time, or when you want to go to sleep after trading Bitcoin the whole day, but leave that 1 BTCUSD trade open.

The disadvantage of a stop loss is that the price at which you place these orders could be activated by a shortterm fluctuation in BTCUSD price. The key is picking a stop loss percent which allows the BTCUSD price to fluctuate within the day to day range while capping the down side risks.

These stop losses are traditionally thought of as a way to prevent and stop losses thus the title. Another use of these orders is to lock in the profits, in which case it is known as a trailing stoploss order.

For a trailing stop order it is put at a percent level below the current BTC USD Crypto market price. This trailing stop loss level is then shifted as the trade position unfolds. Using a trailing stop loss level allows you to let profits run while at the same time guarantees that should the market turn you will have locked in some of your profits.

These stop loss orders can also be used to eliminate risk if a Bitcoin trade becomes profitable. If a trade makes some feasible gains then the stop loss can be moved to break-even point, the point at which you bought the BTCUSD pair, thereby ensuring that even if the BTCUSD trade position moves against you, you will not make any loss, you'll breakeven on that Bitcoin trade.

Trailing stop losses are used to maximize & protect profit as the BTCUSD price rises and cap losses when the price falls.

A good example of an indicator which can be used to set a trailing stop is when you use the parabolic SAR chart indicator & keep moving your stop loss order to the parabolic SAR level.

How to Stop Loss in Crypto - Setting Stop Loss Orders in Crypto Using Bitcoin Indicators

Parabolic SAR for Setting Trailing StopLoss in Bitcoin Trading

Another example is where a trader moves his stop loss order by a certain number of pips after every few hours or after every one hour or after every 15 minutes depending on the Bitcoin trading chart timeframe that the BTCUSD trader is using.

In the example illustration exhibited above the parabolic SAR which had a setting of 2 and 0.02 was used as the trailing stoploss order level for the above chart. The trader would have kept shifting the trailing stop level upwards after every SAR was plotted until the time when the Parabolic SAR was hit & the trend reversed.

Conclusion

A stop loss order is a simple tool yet so many traders & traders fail to use it. Whether ==22==it--isit's used to prevent excessive losses or to lock in the profits, nearly all investing styles can benefit from this trading tool.

Points To Remember When Setting Stop Losses

Here are some crucial points to remember:

Be careful with the points where you set these stop loss orders. If Bitcoin price normally fluctuates 20 points, you do not want to put your order too close to that range else you'll be taken out by the normal price volatility.

Stop Loss orders take the emotions out of the trading decisions & by setting a stop loss you set a pre-determined point of exiting and getting out of a losing trade, meant to control losses and preserve your equity.

Bitcoin traders can always use technical indicators to calculate where to set and place these stop loss levels, or use the concepts of Resistance and Support levels to figure out where to set these stop-losses. Another good indicator used to set these orders is the Bollinger ==22==bandsband indicator where traders use the upper and lower band as the limits of price therefore placing these stop loss orders just outside these bands.

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