What is Take Profit / Stop Loss?
Take profit is a commonly used strategy in contract trading. In this case, the user believes that the price has reached a significant level and that some profit should be realized. By taking profit, the user reduces the position size, thereby converting part of the unrealized gains into actual, withdrawable profit.
Stop loss is also a common operation in contract trading. The user believes that the price has reached a certain level and chooses to reduce the position by accepting a reasonable loss, in order to avoid further irrecoverable losses to the portfolio. Stop loss is a method of risk management.
BitTap provides a take profit / stop loss order function, allowing users to set take profit and stop loss prices in advance. When the latest market price reaches the take profit or stop loss level you have set, the system will close your position at the optimal execution price based on the contract quantity you specified.
When should take profit / stop loss be used?
In general, when a user holds a position but finds it difficult to continuously monitor market movements over a long period, take profit and stop loss orders can be used. In principle, as long as a user holds a position, take profit and stop loss can be applied at any time according to actual needs.
Can take profit and stop loss only be used to close positions?
Yes. Take profit and stop loss orders can only be used to close positions. Planned orders or limit orders can be used to open positions.
Are take profit and stop loss orders linked to existing positions?
Yes, take profit and stop loss orders are based on the current position. If there is no position, you cannot set take profit or stop loss orders. You can set the quantity of take profit and stop loss orders based on the amount available for liquidation in your position.
In other words, if your position consists of 500 contracts, the maximum number of contracts that can be set for take profit or stop loss orders is 500. However, if you have already placed a limit order to close 100 contracts before setting take profit and stop loss, then the maximum number for take profit or stop loss orders becomes 400. Once the limit order is executed and filled, the maximum quantity for take profit and stop loss orders for that position will automatically be reduced to 400.
Without a position, you cannot set take profit or stop loss orders.
How to cancel take profit and stop loss orders?
In your current order list, take profit and stop loss orders will be displayed with distinct labels (take profit, stop loss). You can manually cancel them in the TradingView chart integrated within the BitTap trading interface. When a position is closed manually or via take profit or stop loss, any unfilled take profit or stop loss orders will be automatically cancelled.
Can take profit and stop loss fail?
Yes. In extremely rare cases and in trading environments with very low liquidity, take profit or stop loss orders may not be fully executed. However, this situation is uncommon in actual trading. A more frequent occurrence is that during periods of high volatility and price fluctuation, the actual execution price may differ from the price at which the take profit or stop loss order is triggered. Take profit and stop loss orders may also fail to be executed or may only be partially filled.
Other Important Notes
- Forced liquidation, automatic liquidation, margin calls, and manual position closure will all affect the contract quantity in unfilled take profit and stop loss orders. If the position has been closed, the corresponding take profit and stop loss orders will be cancelled.
- Changes in the expected liquidation price caused by manual margin adjustments may result in the failure of take profit and stop loss execution.
- Users can set up to 20 take profit and stop loss orders.
- Traders cannot set take profit or stop loss orders for the entire position at once, but can do so for positions under “My Copy Trading”.
Risk Disclaimer
If the market is highly volatile, there is a possibility that take profit or stop loss orders may not be executed or may not be fully executed. Please ensure that you fully understand the mechanism of this function, pay attention to the risks, and use it with caution.
When the latest market transaction price reaches the take profit or stop loss price you have set, the system will place an order at the optimal execution price based on the contract quantity specified for that position.
BitTap shall not be held responsible for any asset losses caused by market price fluctuations.