Take-profit and stop-loss orders are essential tools in contract trading, allowing traders to predefine trigger and execution prices. When the market reaches the trigger price, the system automatically places an order at the specified execution price. OKX supports both single and dual-directional take-profit/stop-loss order types, providing flexibility for various trading strategies.
Key Concepts
- Take-Profit Order: Closes a position to lock in profits when the market moves favorably
- Stop-Loss Order: Limits potential losses by closing positions at predefined levels
- Single-Directional: Only one order condition (either take-profit or stop-loss)
- Dual-Directional: Both take-profit and stop-loss conditions active simultaneously
Practical Trading Scenarios
Case 1: Single-Directional Short Position Stop-Loss
Situation: BTC short position opened at $9,000
Goal: Buy to close position if price rises to $10,000
Setup:
- Trigger Price: $10,000
- Execution Price: $10,050 (or market price)
- Action: "Buy to Close"
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Case 2: Single-Directional Long Position Stop-Loss
Situation: BTC long position opened at $9,000
Goal: Sell to close position if price drops to $8,000
Setup:
- Trigger Price: $8,000
- Execution Price: $7,950 (or market price)
- Action: "Sell to Close"
Case 3: Dual-Directional Long Position
Situation: BTC long position opened at $9,000
Goal:
- Take profit at $10,000
- Stop loss at $8,000
Setup: - Take-Profit Trigger: $10,000
- Take-Profit Execution: Market price (or $9,950)
- Stop-Loss Trigger: $8,000
- Stop-Loss Execution: Market price (or $7,950)
- Action: "Sell to Close"
Case 4: Dual-Directional Short Position
Situation: BTC short position opened at $9,000
Goal:
- Take profit at $8,000
- Stop loss at $10,000
Setup: - Take-Profit Trigger: $8,000
- Take-Profit Execution: Market price (or $8,050)
- Stop-Loss Trigger: $10,000
- Stop-Loss Execution: Market price (or $10,050)
- Action: "Buy to Close"
Case 5: Breakout Long Entry
Market Price: $11,500
Strategy: Enter long if price breaks $12,000
Setup:
- Trigger Price: $12,000
- Execution Price: Market price (or $12,050)
- Action: "Buy to Open"
Case 6: Breakdown Short Entry
Market Price: $6,500
Strategy: Enter short if price breaks $6,000
Setup:
- Trigger Price: $6,000
- Execution Price: Market price (or $5,950)
- Action: "Sell to Open"
Key Considerations
- Margin Requirements: Positions and margin are frozen until order triggers
- Execution Risk: Orders may fail during extreme volatility or due to position tier limits
- Price Gaps: Maintain reasonable difference between trigger and execution prices
- Strategy Testing: Always test strategies with small positions first
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FAQ
Q: What's the difference between single and dual take-profit/stop-loss?
A: Single-directional only has one active condition, while dual-directional monitors both profit-taking and loss-prevention simultaneously.
Q: Can I modify an active take-profit/stop-loss order?
A: Yes, you can cancel and recreate orders anytime before they trigger.
Q: How does OKX handle extreme volatility scenarios?
A: During high volatility, orders may execute at the next available price rather than exactly at your specified price.
Q: Is there a minimum position size for these orders?
A: Minimums vary by trading pair and are subject to OKX's position tier rules.
Q: What happens if my internet disconnects?
A: These orders remain active on OKX's servers regardless of your connection status.