How do stop limits work in the world of cryptocurrency?

3 answers

• Dec 29, 2021 · 3 years ago
  Stop limits in cryptocurrency are a type of order that allows traders to set a specific price at which they want to buy or sell an asset. When the market reaches the specified price, the stop limit order is triggered and executed. This can be useful for managing risk by automatically executing trades when certain price levels are reached.
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• Dec 29, 2021 · 3 years ago
  Stop limits work by combining a stop price and a limit price. The stop price is the price at which the order becomes active, while the limit price is the price at which the order will be executed. When the stop price is reached, the order is activated and becomes a limit order. If the market reaches or exceeds the limit price, the order is executed. This allows traders to set a specific price at which they want to enter or exit a position, helping them manage risk and avoid emotional decision-making.
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• Dec 29, 2021 · 3 years ago
  Stop limits are a great tool for managing risk in cryptocurrency trading. Let's say you're holding a certain cryptocurrency and you want to sell it if the price drops below a certain level. You can set a stop limit order with a stop price below the current market price and a limit price that is your desired sell price. If the market price reaches the stop price, your order will be triggered and converted into a limit order. If the market price then reaches or exceeds your limit price, your order will be executed and you will sell your cryptocurrency. This allows you to protect yourself from significant losses and automate your trading strategy.
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