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Want to take your trading to next level? Set a Take Profit order!
Investing in cryptocurrencies has become a hot discussion topic among investors these days. From the introduction of Bitcoin to the huge popularity of Bitcoin and other cryptocurrencies, the crypto world has enjoyed a lot of inclusions, automated tools, and much more. The mass adoption of crypto trading has given rise to different order types, trading bots, signals, and many other options.
With the rise of the crypto trading world, there has been a surge in demand from crypto traders to include these options on popular exchanges. This includes different order types where you have greater control over your investments, and allows you to decide your buying and selling options.
As one of the popular crypto trading platforms, Growlonix allows its traders to use different order types like market order, sell order, limit order, and more successfully. We support more than 17 exchanges and advanced order types to let traders earn good profits. There are various applications and strategies in cryptocurrency trading used by the traders and here we are introducing Take Profit order and how to use it effectively.
What is a Take Profit order?
Take Profit (T/P) order is a special type of order which traders can use to close the trade. This order type makes the trading results more profitable. A T/P order is a standing order which is used to sell a crypto asset once it reaches the preset price. Selling at this level ensures that the trader will earn a profit on his trade.
T/P strategies are gaining popularity among traders who place short-term trades. This order closes the open position for a profit whenever it reaches the predetermined price/value of profit. Setting a take profit at Growlonix allows its traders to place trades automatically. There are different strategies which traders can adopt with T/P orders like support and resistance, daily range levels, risk reward ratio, chart patterns, etc.
The profit price in T/P order can be set in terms of absolute price or the percentage. These orders can be used to open positions. Apart from this, Take Profit orders guarantee that the full volume will be executed, with the risk of possible market price slippage.
How can one place Take Profit order at Growlonix?
- First, you have to create an account on Growlonix and login
- Now enter your API key and secret keys on the settings page
- Select exchange (Binance, Kraken, Coinbase Pro, etc.) from the drop-down menu available on the left
- Select Take Profit/Take Profit Limit order
- Select base and quote coin. Say, BTC/LTC
- Select the number of coins you want to sell for profit. Note: The quantity could be in a fraction too
- Click on the drop-down menu near Take Profit. The options available here are market/limit/trailing orders. Selection of option means that if the market price rises to the set stop value, the order will be executed as Limit sell, market sell, or the trailing stop sell order
Important Note: Always make sure that the stop value is higher than the current bid price
So, this was about how to set Take profit order on Growlonix. Now let’s move further to some examples of T/P order and how it works?
Example:
Let’s say Mr. X buys BTC at $10,000, and puts take profit +10% which means, he has created an order to sell BTC at a price of $11,000.
For some time, BTC has traded within the range of $10,000, and then continued to grow. Upon reaching $11,000 or above, your pending order with take profit +10% will be filled, and the system will close the trade with a sell order.
Here your total profit comes out as $1000.
So, Take Profit order is a kind of pending order that is used to close a profitable position once it reaches the specified price.
Another example:
Suppose a trader goes long i.e. enters a buy position by entering the market at 1.2880, expecting the price to rally higher. Now, he wants to benefit from the rise. So, here he places a Take Profit order at a level higher than the entry price, say at 13.280. If the stock price hits the predefined Take Profit price, the position will be closed and the profits are locked in.
On the other side, if the trader enters a sell position expecting that the prices for the asset will fall, he places a Take Profit order at a lower level from the entry price. Let’s say, he has entered the market at the same price 12.880. Now, he decides to place a Take profit order at 12.780. If the stock price hits to the level of 12.780, the position is closed.
Take profit orders are also termed as stop loss orders.
Expert advice for the traders while placing a T/P order
There might be times, even if a trader places a good T/P order, he/she loses the trade.
Why does this happen at times?
Is it possible?
Of course, Yes! So, it is recommended to follow your strategy and avoid the mistakes which may lead to losses.
Let’s have a look at some of these:
- Don’t move Take Profit closer to the entry price half-way during the trade.
- Have an algorithm of market analysis. Be careful.
- Don’t close a position too early.
- Don’t make predictions based on short-term charts. This may lead to wrong decisions.
- Make predictions based on technical and fundamental analysis. Otherwise, you may lose.
- Not appropriate for long-term traders who are willing to tolerate more ups and downs.
Now the question is how to set a T/P order?
This is a common query among traders. While there is no written rule about this, the expert traders use multiple approaches. Let’s have a look at them.
Use your risk/reward ratio
One of the best approaches to place a T/P order is to use your risk to reward ratio to set take profit. For example, if you only risk 10% of your cash, then it’s better to set your T/P 10% above the current price.
This might be a small level, but keep in mind that it is a 10% return on your trade.
Fibonacci retracement
Another approach to place a take profit order is to use the Fibonacci retracement level. The popular Fibonacci retracement levels are 23.6% and 38.2% in crypto which are used to identify the turning points. If the price of any asset is trading at $20 which is the 23.6% retracement, you can add Take Profit at 38.2% at $24. In most cases, when a price moves above 23.6%, there are higher chances that it will test 38.6%. And, therefore, you can set the T/P level here.
Further, you may use the key psychological level. How? Let’s say the price of an asset is trading at $63 and it manages to go above $65, the next logical level of resistance is $70. So, here also you may set the T/P level.
Growlonix provides the best crypto trading signals to its traders which help them to place their trades successfully using the right tools and order types.
When should I use T/P order?
T/P order is best used with the short-term strategy. You may exit the trade as soon as you hit your profit target, without letting your gains slip away.
Conclusion
So, you can’t avoid Take Profit orders to maximize your gains and reduce your losses. Use crypto signals provided by Growlonix and earn smartly. As soon as you receive a signal, set it smartly to your trade to control your gains and losses.
