Stop Loss Bitcoin Order Summary: Points To Remember When Putting

The key to placing top loss orders in bitcoin trading isn't to set too close or too far and not exactly on the support or resistance areas.

A few pips below the support or above resistance zones is the best place.

If you're going long (buying a bitcoin trading instrument), just look for a nearby support level that is below your trade entry point and put this order about 10 pips to 20 pips below that support level. The example illustrated below show the level where one can put their stop loss orders just below the support level on a bitcoin chart.

Support Level for Placing Stop Loss Bitcoin Order Level for a Buy Trade

If you're going short (selling a bitcoin trading instrument), just look for a nearby resistance level which is above your entry point & set this stop order about 10 pips to 20 pips above that resistance level. The example illustrated below show the level where one can put their stop orders just above the resistance level on a bitcoin chart.

Resistance Level for Placing Stop Loss Bitcoin Order Level for a Sell Trade

You can also use stop loss cryptocurrency orders to lock in profits, Not Just for Preventing Losses

The advantage of a stop loss cryptocurrency trading order is that you do not have to monitor on a daily basis how the btcusd trading market is performing. This is especially handy when you're in a situation that prevents you from watching your trades for an extended period of time, or when you want to navigate to sleep after trading the whole day.

The disadvantage is that the bitcoin trading price at which you put these stop orders could be activated by a short term fluctuation in bitcoin trading price. The key is picking a stop loss order percent which allows bitcoin price to fluctuate within the day to day range while capping the down side risks.

These cryptocurrency orders are traditionally thought of as a way to cap losses thus the name. Another use of these stop loss orders is to lock in profits, in which case it's referred to as a trailing stop loss.

For a trailing stop order it is put at a percent level below the current market bitcoin trading price. This trailing level then shifted as the trade position unfolds. Using a trailing stop loss level allows you to let profits run while at the same time ensures that should the btcusd trading market turn you'll have locked in some of your trading profits.

These cryptocurrency orders can also be used to eliminate risk if a Bitcoin trade transaction becomes profitable. If a trade transaction makes some substantial gains then the stop loss order can be moved to break even point, the point at which you opened buy, thereby ensuring that even if the trade position goes against you, you will not make any loss, you will break even on that trade.

Trailing stop cryptocurrency orders are used to maximize & protect profit as bitcoin trading price rises and limit losses when the bitcoin trading price falls.

A good example is when you use the parabolic SAR Cryptocurrency Indicator & keep moving your stop order to the parabolic SAR level.

Parabolic SAR Crypto Indicator for Setting Trailing StopLoss Crypto Order in Crypto

Another example is where a trader moves his stop loss by a specific number of pips after every few hours or after every hour or after every 15 minutes depending on the Bitcoin chart timeframe that the trader is using.

In the cryptocurrency trading example above the parabolic SAR which had a setting of 2 and 0.02 was used as the trailing stop loss order for the above trading chart. The trader would have kept shifting the trailing stop loss level upwards after every SAR was drawn until the time when the Parabolic SAR was hit and the bitcoin trend reversed.

ConclusionA stop order is a simple trading tool, yet so many investors fail to use it. Whether it is used to prevent excessive losses or to lock in profits, nearly all trading styles can benefit from this trading tool.

Points To Remember When Placing These Stop Loss Orders

Here are some important points to remember:

• Be careful with the points where you put these stop loss orders. If bitcoin normally fluctuates 20 points, you do not want to put your top loss order too close to that range else you'll be taken out by normal market volatility

• Stop Loss Bitcoin Orders take the emotion out of a trading decisions & by setting one you set a predetermined point of exiting a losing trade, meant to control losses.

• Traders can always use indicators to calculate where to put these regions, or use the concepts of Resistance and Support to decide where to set these stop loss orders. Another good technical indicator used to set these stop loss orders is the Bollinger bands where traders use the upper & lower band as the limits of bitcoin price therefore putting these orders outside the bands.