Take-profit and stop-loss orders are essential tools in contract trading. They allow you to preset trigger and execution prices, enabling the system to automatically place orders when market conditions meet your criteria. OKX supports both single and dual-direction take-profit/stop-loss orders.
Key Features of Take-Profit/Stop-Loss Orders
- Automated Execution: Triggers when market reaches specified price levels
- Risk Management: Helps protect profits and limit losses
- Flexible Configuration: Supports both single and dual-direction setups
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Practical Examples
Example 1: Single-Direction Short Position Stop-Loss
Scenario: You hold a BTC short position with entry price at $9,000 and want to set stop-loss at $10,000.
Setup:
- Trigger price: $10,000
- Execution price: $10,050 (or market price)
- Action: Buy to close short
Outcome: If price rises to $10,000, system executes buy order at $10,050 to limit losses.
Example 2: Single-Direction Long Position Stop-Loss
Scenario: You hold a BTC long position at $9,000 and want stop-loss at $8,000.
Setup:
- Trigger price: $8,000
- Execution price: $7,950 (or market price)
- Action: Sell to close long
Example 3: Dual-Direction Long Position
Setup for Long Position:
- Take-profit trigger: $10,000
- Stop-loss trigger: $8,000
- Execution: Market order or specified price
Outcomes:
- If price hits $10,000: Take-profit executes, stop-loss cancels
- If price hits $8,000: Stop-loss executes, take-profit cancels
Example 4: Dual-Direction Short Position
Setup:
- Take-profit trigger: $8,000
- Stop-loss trigger: $10,000
Advanced Trading Strategies
Example 5: Breakout Long Entry
Strategy: Buy when BTC breaks resistance at $12,000 (from $11,500)
- Trigger: $12,000
- Execution: Market order
Example 6: Breakdown Short Entry
Strategy: Short when BTC breaks support at $6,000 (from $6,500)
- Trigger: $6,000
- Execution: Market order
Key Considerations
- Margin Requirements: Orders freeze margin until triggered
- Execution Risks: May fail during extreme volatility
- Price Gaps: Maintain reasonable difference between trigger and execution prices
- Customization: Adjust parameters based on market conditions
FAQ Section
Q: What's the difference between single and dual-direction orders?
A: Single-direction handles one condition (take-profit OR stop-loss), while dual-direction manages both simultaneously (but only one executes).
Q: Can take-profit/stop-loss orders guarantee execution?
A: No, extreme market conditions may prevent order fulfillment.
Q: How do I determine optimal trigger prices?
A: Consider technical levels (support/resistance) and your risk tolerance.