The Professionals' Secret – How does the trailing stop "secure" your profits?
Smart Security Tool: Trailing Stop 🚀
Are you tired of seeing your profits evaporate when the price suddenly reverses? The trailing stop is the solution to ensure that these profits turn into real guaranteed gains in your pocket!
It's not just a regular "Stop Loss" order; it's your personal guardian in the market.
💡 How does Trailing Stop work? (The mechanism intelligently)
You set a fixed distance (points or percentage) between the current market price and the stop-loss level.
In the right direction (you are winning): As the price of the digital asset (like BTC or ETH) rises, your stop-loss order automatically moves with it, maintaining the same distance you set. This ensures that you are continuously "locking in" profits.
When the price reverses (the risk): If the price starts to fall and moves toward the stop-loss, the Trailing Stop order stops moving and remains fixed at the last level it reached.
Safe exit: If the price continues to drop and reaches the fixed stop level, the trade is automatically closed at a profit (or with much less loss), protecting you from a significant decline.
💰 Simple practical example:
The trade: I bought BNB at a price of $300.
Trailing loss: I set it at $10 (approximately 3.3%).
What happens:
The price rises to $350. The trailing stop follows and becomes at $340. (You have secured a profit of at least $40).
The price suddenly reverses and drops to $340.
Result: The trade is automatically closed at $340, securing a profit instead of waiting for the entire profit to be lost.
🔑 When to use it on Binance?
• To make the most of trends: When you are sure there is a strong uptrend and do not want to exit early.
• To trade without constant monitoring: It allows you to secure your profits even when you are away from the screen.
#Risk_Management
#Binance
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