Trade Bitcoin Trading

Stop Loss Bitcoin Order Summary: Points To Remember When Putting

For Bitcoin stop losses, avoid spots too close or far. Skip exact support or resistance levels.

A few pips (points) below the support or above the resistance levels is the optimal location.

If you're going long (buying a bitcoin instrument), just look for a nearby support level that is below your trade entry point and place this order about 10 to 20 pips below that support zone. The example shown below show the level where one can put their stop loss orders just below the support level on a bitcoin chart.

Support Level for Putting Stop Loss Bitcoin Order Level for Buy Bitcoin Trade - How Do You Set Bitcoin Stop Losses?

Support Level for Placing Stop Loss Bitcoin Order Level for a Buy Trade

If you're going short (selling a bitcoin instrument), just look for a nearby resistance level which is above your entry point & set this stop order about 10 pips to 20 pips above that resistance level. The example illustrated below show the level where one can put their stop orders just above the resistance level on a bitcoin chart.

Resistance Level for Placing Stop Loss Bitcoin Order Level for Sell Bitcoin Trade - How to Set Bitcoin Stop Losses

Resistance Level for Placing Stop Loss Bitcoin Order Level for a Sell Trade

You can also use stop loss cryptocurrency orders to lock in profits, Not Just for Preventing Losses

The good thing about a stop loss order for cryptocurrency is that you don't have to check the btcusd market every day to see how it's doing. This is really helpful if you can't watch your trades for a long time, or if you want to go to sleep after trading all day.

A drawback is that the price of bitcoin designated for these stop orders might be triggered by brief, short-term swings in the bitcoin price. The crucial element is selecting a stop-loss order percentage that permits intraday fluctuations in the bitcoin price while simultaneously limiting downside risk exposure.

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

A trailing stop order is placed at a certain percentage below the current bitcoin price in the market. This trailing level then moves as the trade goes on. Using a trailing stop loss lets you keep making money, but also makes sure you get some profit if the btcusd market changes direction.

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

Trailing stop orders are used to make the most money and protect it as the bitcoin price rises, and to limit losses when it falls.

A good example is when you use the parabolic SAR Crypto Indicator & keep moving your stop order to the parabolic SAR level.

Parabolic SAR Bitcoin Indicator for Setting Trailing StopLoss Bitcoin Order in Bitcoin

Parabolic SAR Indicator for Setting Trailing StopLoss Crypto Order in Crypto

For instance, a trader may adjust their stop loss by a fixed amount of pips after a few hours, or perhaps after one hour or even every 15 minutes, depending on the timeframe of the Bitcoin chart they are utilizing.

In the above example the parabolic SAR which had a setting of 2 and 0.02 was used as the trailing stop loss order for the above chart. The trader would have kept shifting the trailing stop loss level upwards after every SAR was drawn until the moment when the Parabolic SAR indicator was hit and the bitcoin trend reversed.

Conclusion: A stop order is a simple tool, but many traders don't use it. It can help you avoid big losses or protect your profits, so almost every trading style can benefit from it.

Points and Factors To Remember When Placing These StopLoss Orders

Here are some key points to remember:

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

  • Stop Loss Bitcoin Orders take the emotion out of a trading decisions & by setting one you set a predetermined point of exiting and getting out of a losing position, meant to control losses.

  • Traders can always use indicators to calculate where to set these regions, or use the concepts of Resistance & Support to decide where to set these stop loss orders. Another good indicator used to set these stop loss order orders is the Bollinger bands where traders use the upper & lower band as the limits of bitcoin price therefore putting these orders outside the bands.

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