Do you want to hear an exciting and at the same time pitiful story? I won’t bore you with it but the short version is, I have seen a crypto trader losing $1,000 just because he was overconfident not to use stop-loss anymore in his trades.
For Christ’s sake, you cannot or never predict the crypto market most especially if you are a total beginner, hence, the need to draw your attention and say, “always make use of Stop-Loss per trade when necessary”.
The only time you can avoid using Stop-Loss is if you are day trading or trading against the trend. That way, your work is to buy at every dip and sell at every surge.
But if you are to follow the trading concept we considered here, that is, you trade with the right trading strategies you need it.
Check this out: there are lots of Case Studies coming up on Crypto Trading, Investing and securing your digital assets. Click here to get all stories. Also, click the notification bell on top of the page to get case studies, experiments, and real-time Journeys IN CRYPTO. Refresh the page if you don’t see it.
What is Stop-Limit All About?
The stop-limit property is a trading function that helps you set conditional statements for your trades.
For instance, you can say, if Coin A goes down to point A, buy Coin A at point B – that is a conditional statement, right? Yeah.
Going on you will understand it better with an example.
The Need to Use Stop Limit for Cryptocurrency Trading
Let’s say you are following certain trading rules such that you are in profits usually hours after entering your trades. Maybe entering at 4am and being at profits by 9am.
Between 4am and 9am, something great (BAD or GOOD) can happen, right? The bad is to avoid more losses, and the good is all yours – profits.
The bad side of the trade which is avoiding the scary losses is why we need to use the Stop-Limits trading property.
When You Don’t Have To Use Stop-Loss in Cryptocurrency Trading
In case you don’t want to make use of Stop-Loss in your trade entries, there is a way out.
The best way out to avoiding using Stop-Loss is to monitor the crypto market manually or with a tool.
With close monitoring of the market, you can see how your trades are doing “good or bad”.
If bad, you sell out to avoid more losses, and if good, you allow it to run to 100% profits, if possible.
How to Use Binance Stop-Limit Video Overview
How to Use Stop Limit Order on Binance & Set Stop-Loss for Crypto Trading Accurately
Before we jump into the main lesson, here are the top cryptocurrency trading functions you want to consider every time you trade.
The top 3 trading properties to use
1). Limit Order (buy & sell)
2). Market Order (buy & sell)
3). Stop-Limit (buy & sell)
Limit Order – How to use Limit Order on Binance
The Limit Order property is a trading function that helps us trade on our own terms. Here is it.
Buying Limit Order:
For instance, a coin like #MTL was selling at #3200, a “Buy Limit Order” can be set at #3,000.
What this means is, having set to enter the trade at #3000, if #MTL goes down to #3,000, the buying order will be fulfilled.
That is, you are buying or entering a trade at your own position.
Selling Limit Order:
In the same vein, let’s say #MTL was trading at #3200 and you set a sell limit order at #3800, if the market goes as planned and #MTL rises to #3800, your limit order will be fulfilled.
Here is how it looks on your Binance Trading platform.
Point 1 – the market price.
Point 2 – I select Limit Buy order.
Point 3 – I enter my limit price I want to buy against the market.
Point 4 – I click on Buy.
Result – if the MTL goes down to #.1070, my order will be fulfilled.
The main essence of the Limit Order is trading at your own positioning. Also, it guides against the “Fear of Missing Out” on a coin.
That is, let’s say, you just came in and saw #MTL trading at #3,000 and you are like, “I want to buy, with a limit buying order set below the market level”, say #MTL 2800.
Good enough the trade will be fulfilled if the market goes further down thereby helping you purchase more coins lower than and against MTL at #3,000
2). Market Order – How to use Market Order on Binance
The market order is a trading property that allows you to trade instantly without using any conditions.
If for instance you were given a signal or you want to BUY or SELL a coin instantly, to do that, all you need to do is to select the MARKET order property, enter the amount of your coin and click on “Buy or Sell” and the trade will be executed ASAP using the market price.
Here is how Market Order looks like on your Binance Trading platform.
Result – you get instant order filled based on the market price.
3). Stop-Limit – How to use Stop-Limit (buy & sell) on Binance
Like we said before now, the stop-limit property is a trading option that helps you set conditional statements for your trades.
For instance, you can say, if MITH selling at #2300 goes down to point #1999, buy Coin MITH at #2000 – a conditional trading command.
Using the Stop-Limit for a buying order is all about setting a conditional buying order.
For instance, if #MTL was trading at #3200, and you wanted to BUY at your preferred position, you can set a Buying Stop-Limit order saying, if #MTL goes down to #3200, buy #MTL at #3190.
For this type of order, your position is only fulfilled when the condition is met. If not, your Buying order won’t be triggered.
Using the Stop-Limit for a Sell order is also about setting a conditional Selling order.
For this type of order, your position is also fulfilled when the condition is met. If not, your selling order won’t be fulfilled. Here is an example.
If you had bought #MTL and it’s trading at #3200, and you wanted to SELL at your prepared position for more profit, let’s say you wanted to SELL at #3500+, you can set a condition saying, if #MTL goes up to #3900, sell at #3890.
With such a stop-limit, you make more money because you anticipated (based on the signals received or based on your trading decisions) that the market will go that way.
Here is how Stop-Limit looks like on your Binance Trading platform using the assets NBS/USDT.
Here is the trigger to confirm the trade entry… 😎
Having entered the trade.
My Stop-Loss here is.
If NBS goes down to #0.01371 sell the coin at #0.01375.
Since the coin is traded at #0.01399, the trade won’t be fulfilled until the above command is satisfied.
And if not satisfied, you go ahead to make more money as the coin surges.
Kindly Note: for Stop-Limit, you have to set the condition points a bit close to each other so the trades can be fulfilled.
An example is if you say, sell #MTL at #3300 if it goes down to #3100, this trade entry might not be fulfilled because the gap is too wide.
1-5 points is okay.
The same thing goes for selling. So, test your positions for your trades. Use our example above for inspiration.
My Hack for crypto trading: What I usually do is, instead of setting SELL Stop-Limit, I like to use a coin alert tool.
With this tool, you will be notified when your coin has reached the selling position you had set.
The good point about it is, instead of the coin selling out (SHOULD IT GO FORWARD), the alert tool will help you make more profits as it will alert you on the positive positioning.
Here’s a typical example. I bought #MTL at #3,000 and suddenly it went up to #4,000.
If I had set a SELL order at #3,500, I would lose the profits going forward.
So, I like to set ONLY STOP-LOSS using against losses than SELL ORDER that gives room to earn more.
STOP-LOSS using against losses? See below.
How to set up Stop-Loss for crypto trading on Binance
Using a crypto coin signal below.
Sell: 3400, 3600+
If we were to buy #MTL between 3,150-3,200, going on, we entered the trade at #3,200, a good stop-loss would be at #3,000 or #3050 (depending on the value of the coin).
The command is, should the MTL coin go down to #3,000 or #3050, trigger a sell to prevent further losses.
What happens if the coin does not go down?
If the coin keeps rising you will be in profits, which is to say if it moves from the buying position of #3150 to #3700+.
How to make sense of Stop-Loss in crypto trading.
1. Stop-Loss for BEARish trading entries.
2. Crypto Alert Tool for the BULLish trading entries.
Here is what they mean.
a). If you entered a trade, say #MTL at #3,200 and the asset WENT DOWN (Bearish) to #3150, automatically sell out using the Stop-loss function.
b). If you entered a trade, say #MTL at #3,200 and the asset went UP (Bullish) to #3,700, automatically signal me based on the fact that we used a crypto alert tool like Coindera App.
In essence, STOP-LOSS orders take care of “the loses”, while the crypto alert tool takes care of the Wins – if the coin surges further.
What we are saying here is that, with the coin alert tool, we can remove the stop-loss (if we had one) if the coin rises to sell the coin at a more profitable position.
It’s a wrap.
That’s all about the antics of using Stop-Limit on Binance cryptocurrency trading platform.
This is the core strategy to understand how to set Stop-Loss for your trades on Binance or any other trading platform.
On Binance there is a new trading property called OCO. This Stop-Limit property is simpler to implement since you can set both the Stop-Limit & Stop-Loss properties at once.
OCO – One Cancels the Other means – to place a stop-limit order and a limit order at the same time. When either of the order pairs is triggered, the other order will be cancelled. If one is cancelled, the OCO pair will be cancelled.
Over to you.
How has your experience been using the Stop-limit trading function on Binance trading platform? Let’s hear you in the comment section.