What is the meaning of trailing stop in the context of cryptocurrency trading?

1 answers

• Hove ObrienJun 15, 2024 · a year ago
  In the context of cryptocurrency trading, a trailing stop is a feature offered by some exchanges, including BYDFi, that allows you to automatically adjust your stop loss order as the price of a cryptocurrency changes. It works by setting a percentage or dollar amount below the current market price, and if the price starts to decline, the trailing stop will stay at that set percentage or dollar amount below the highest price reached. However, if the price starts to rise, the trailing stop will move up with it, always maintaining the set distance. This way, you can protect your profits and limit your losses without constantly monitoring the market. Trailing stops are a valuable tool for both experienced and novice cryptocurrency traders, as they provide a way to manage risk and optimize trading strategies.
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