Adding a trailing stop to your trading arsenal is a great way to get out of a long position when the price reverses. The trailing stop order will automatically be triggered when the price changes direction. The order will remain in force until the price exceeds the activation price or the price drops below the stop price. This method of closing a position will ensure that you lock in any gains and minimize any losses.
In a nutshell, a trailing stop order works by calculating the difference between the current price and the trigger price. If the difference is small, the order will not work. However, if the difference is larger, the order will be able to generate a larger profit. Typically, the smaller the difference, the smaller the percentage of deviation.
The trailing stop is a clever way to capture the most profit in a position. It will automatically close your trade when the price reaches a certain percentage. The trick is to pick a percentage value that’s not too tight and is not too far off the current price. This value should be based on a combination of past movements and other measurable criteria. A high callback rate might be better during volatile periods, while a low rate might be better in more stable times.
The Trailing Stop is a clever mechanism that uses the latest cryptography technology to automatically calculate the most profitable path of action. The algorithm will calculate a profit based on the average price of the order operation. The percentage value can vary as the trigger price is recalculated. For example, if you choose a 1% deviation, the algorithm will calculate the most profitable path of action as the average price of a sell order.
The Binance Trailing Stop is an effective stop loss order that automatically turns the Stop Loss up when the price trend reverses. You can choose to manually turn the Stop Loss up, if you desire. If you do not want to turn the Stop Loss up, you can turn it off. You can also choose a preset value. You can choose from 1%, 2%, 3%, and 4%.
There are many benefits to using a trailing stop, including reduced losses, a larger profit, and a more stable position. You can choose to use a trailing stop order for a wide variety of trading strategies. The trailing stop can be set to trigger at a specific trigger price or mark price. You can also choose to use a 1% callback rate, a 2% callback rate, or a 5% callback rate. These are the most common values.
For example, a trailing stop order on the BTC/USD pair will trigger when the price of the crypto asset drops from a peak of 150,000 USD to a trough of $9 500. The stop order will be automatically activated at 115,000 USD, but will close at a temporary trough of $10,000. When you use a trailing stop, you are essentially limiting your losses to the price you entered.