How to set up stop-profit and stop-loss for perpetual contracts

Example Sentence:Setting stop-profit and stop-loss orders for perpetual contracts helps automate risk management and secure profits, but the execution price may vary slightly due to market fluctuations.

Oct 24, 2024 at 07:46 am

How to Set Up Stop-Profit and Stop-Loss for Perpetual Contracts

Step 1: Understand Stop-Profit and Stop-Loss Orders

Stop-profit order: Instructs the exchange to automatically sell an asset once it reaches a predetermined price (profit target).
Stop-loss order: Instructs the exchange to automatically sell an asset once it falls to a predetermined price (loss limit).

Step 2: Choose a Trading Platform

OKX: A leading crypto exchange offering perpetual contracts.
Binance
ByBit
Huobi
KuCoin

Step 3: Fund Your Account

Deposit funds into your trading account using supported methods (e.g., crypto, wire transfer).

Step 4: Place a Perpetual Contract Order

Navigate to the perpetual contracts section of your chosen platform.
Select the trading pair you wish to trade (e.g., BTC/USDT).
Enter your desired order parameters (e.g., order size, leverage).

Step 5: Set Stop-Profit and Stop-Loss Levels

Once your order is placed, click on the "Stop" tab.
Enter the desired price level for your stop-profit and stop-loss orders.
Adjust the "Trigger Type" if necessary (e.g., mark price, index price).

Step 6: Activate the Orders

Once satisfied with your settings, click on "Save" or "Confirm" to activate the stop-profit and stop-loss orders.

Example:

You buy 1 BTC (at $19,000) with 5x leverage, aspiring for a profit of 5%.

Stop-profit: $19,950 (5% above entry price)
Stop-loss: $18,050 (5% below entry price)

Note:

Stop-profit and stop-loss orders are effective risk management tools to limit potential losses and secure profits.
Set realistic target and buffer prices to avoid unnecessary triggers.
Monitor your positions regularly to adjust orders if market conditions change.
Remember that stop-loss orders do not always execute at the exact specified price due to market volatility.

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