Take-profit and stop-loss are types of conditional orders designed to automatically trigger trades when specific price conditions are met. These tools help traders lock in profits or limit losses by executing predefined orders once the contract's latest price, mark price, or index price reaches the set trigger level.
Why Use Take-Profit and Stop-Loss?
- Risk Management: Prevents excessive losses when the market moves against your position.
- Profit Protection: Secures gains when the market favors your trade direction.
- Flexibility: Can be set when opening a position or afterward.
Setting Take-Profit and Stop-Loss on Mobile (App)
1. During Order Placement
Tap [Take-Profit/Stop-Loss] in the order interface to configure:
- OCO (One-Cancels-the-Other): If one order triggers, the other cancels automatically.
- Partial Take-Profit: Splits take-profit orders into multiple price levels.
OCO Mode
- Set trigger prices for take-profit/stop-loss.
Choose order type:
- Limit Order: Fixed execution price.
- Market Order: Defaults to market price upon triggering.
- Select price type: Last Price, Mark Price, or Index Price (default: last price).
Partial Take-Profit Mode
- Add multiple take-profit levels for portions of the position.
- Enable [Breakeven Stop] to adjust stop-loss to entry price after the first take-profit executes.
2. For Open Positions
Navigate to [Positions], select a position, and tap [Take-Profit/Stop-Loss]. Choose from:
- Fixed Quantity: Independent of position changes.
- Entire Position: Adjusts with position size.
- Trailing Stop: Tracks price movement at a set distance (price or percentage).
Setting Take-Profit and Stop-Loss on Web
1. During Order Placement
Click [Open Position] → [Take-Profit/Stop-Loss], then:
- Enter take-profit/stop-loss prices.
- Select order type (limit/market).
- For advanced options, click [Advanced] (similar to mobile settings).
2. For Open Positions
Under [Current Positions], select a position and click [+ Add] next to [Take-Profit/Stop-Loss]. Configure:
- Trigger prices.
- Order type and quantity.
- Choose from Fixed Quantity, Entire Position, or Trailing Stop.
Key Terms Explained
- Trigger Price: Activates the order when reached.
- Order Price: Execution price post-trigger.
- Last Price: Real-time trade price.
- Mark Price: Used for PnL calculation (derived from spot index + basis moving average).
- Index Price: Weighted average from major exchanges.
FAQs
1. What happens if the price doesn’t reach the trigger?
The order won’t execute. No funds are frozen before triggering.
2. Why might an order fail?
Due to price limits, insufficient margin, or system issues. Check order status in [Open Orders].
3. How does a trailing stop work?
It dynamically adjusts the stop-loss as the price moves favorably, maintaining a set distance.
4. Can I modify an active take-profit/stop-loss?
Yes, but breakeven stops may deactivate if changes are made.
Pro Tips
- Use market-close-all for instant liquidation.
- Monitor volatility; extreme swings may prevent order execution.
- Test strategies in a demo environment before live trading.