Use of stop loss orders to protect the cryptocurrency investments
The world of cryptocurrencies has experienced rapid growth and volatility in recent years, including the right strategies. One of the effective ways to protect the Krypto portfolio is the use of stop loss orders. Profit.
** What are Stop loss orders?
The loss of the market order, which automatically sells an investment if its price falls below a predetermined level. This order is designed to restrict possible losses when the cryptocurrency value is reduced. Setting the Stop Loss Order to close profits and prevent additional losses.
How to Use Stop Loss Orders
Bitcoin (BTC), EThereum (ETH) or Litecoin (LTC), follow these steps:
1.
- Debit funds : Finance your trading account with the amount of cryptocurrency you want.
- Select order type : Select
- Set the stop loss price : Determine the price this is called the stop loss price.
- Choose the amount of your order
: Decide how many cryptocurrencies you have to sell when setting up your stop loss order.
Example: Stop Loss Order Using BTC -N
Suppose you bought 1000 units of Bitcoin (BTC) for $ 10,000 and would like to use the stop loss order for $ 9,000. To set your order:
- Go to the trading platform and select «Stop Loss».
- Select the type of «Market» and enter the stop loss price ($ 9000).
- Set the order quantity (1000 units) according to your preference.
Benefits of using Stop Loss Orders
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* Limit possible losses : You can limit losses by setting the stop loss if the cryptocurrency value is reduced.
* Close profit :
* Diversify your portfolio : Stop Lows orders allow you to diversify your portfolio by dividing fun into various cryptocurrencies.
Risks and considerations
While stoppage loss orders may be effective in protecting investments,
* Order enforcement fees : Some trading platforms charge a fee for the execution of stop loss orders.
* Time to replace your order :
* Market Volatility : Cryptoraca markets can be very volatile and losses can not be effective if the market moves fast.
Conclusion
The use of STOP loss orders is a simple yet effective way to protect cryptocurrency investments. Stop order power to protect your portfolio. Cryptocement strategies before investing in cryptocurrencies.
More tips
* Diversify your portfolio : Distribute your investments to different cryptocurrencies to minimize the exposure of a single device.
* Realistic Stock Set : Find out that there is a risk of loss even with the stop loss order. Not really exclusively about this strategy to protect investment.
* Monitor market conditions : Take care of market trends and set the stop loss order accordingly.