What does 'trailing stop' mean in the context of cryptocurrency trading?

3 answers

• Dec 29, 2021 · 3 years ago
  A trailing stop is a type of stop loss order that automatically adjusts as the price of a cryptocurrency moves in a favorable direction. It allows traders to lock in profits and limit potential losses. When the price of a cryptocurrency increases, the trailing stop order adjusts upward, maintaining a specific percentage or dollar amount below the highest price reached. If the price then starts to decline, the trailing stop order remains at the highest price reached. If the price falls below the trailing stop level, the order is triggered and the position is closed. Trailing stops are useful for traders who want to protect their profits while allowing for potential further gains.
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• Dec 29, 2021 · 3 years ago
  In simple terms, a trailing stop is like a safety net for traders. It automatically adjusts the stop loss level as the price of a cryptocurrency rises, ensuring that profits are protected. This means that if the price suddenly drops, the trailing stop will be triggered and the position will be closed, limiting potential losses. Trailing stops are a popular tool among cryptocurrency traders because they offer a way to secure profits without constantly monitoring the market.
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• Dec 29, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, offers a trailing stop feature that allows traders to set a stop loss order that automatically adjusts as the price of a cryptocurrency fluctuates. This feature is especially useful for traders who want to protect their profits while still allowing for potential gains. With BYDFi's trailing stop feature, traders can have peace of mind knowing that their positions will be automatically closed if the price falls below a certain level, minimizing potential losses.
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