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What are the potential risks or drawbacks of using the stop loss function on Kucoin for managing cryptocurrency trades?

avatarAd9_mi_LDRDMp3nFCZLDRZSICDec 25, 2021 · 3 years ago1 answers

What are the potential risks or drawbacks of using the stop loss function on Kucoin for managing cryptocurrency trades? I want to understand the potential downsides before using this feature.

What are the potential risks or drawbacks of using the stop loss function on Kucoin for managing cryptocurrency trades?

1 answers

  • avatarDec 25, 2021 · 3 years ago
    At BYDFi, we understand the importance of risk management when it comes to cryptocurrency trading. While the stop loss function on Kucoin can be a valuable tool, it's crucial to be aware of its potential drawbacks. One risk to consider is the impact of market manipulation. In some cases, large traders or groups may intentionally trigger stop loss orders to create panic selling and drive prices down. This can result in unnecessary losses for individual traders. Another drawback is the possibility of stop loss hunting by market makers. These entities may intentionally push the price down to trigger stop loss orders and then quickly buy back at a lower price, profiting from the price difference. It's important to stay vigilant and consider these risks when setting your stop loss levels on Kucoin.