Take Profit Order an Excellent Tool to Automate Your Trading

Take Profit Order an Excellent Tool to Automate Your Trading The crypto trading market is known for its volatility, creating endless opportunities for buying, selling, and taking profit at the right time. While no one knows any magical formula for timing the market and taking profits out, but there are multiple strategies that a trader can employ to maximize his gains. If you are thinking of taking profits out from your crypto trading, but don’t know how or when to do so because you lack the right strategy, then you should go through this article. From when to sell out your crypto assets to maximize your gains, to learning how to take out profits is fundamental to your trading success.

Take Profit order Crypto trading is a risky option, but placing the right trade orders can make the difference. And, one such order type is the Take Profit Order which helps traders to earn profits while minimizing the risks. This order type is setup to maximize the shortterm profits of the traders on their crypto investments. In this order, a trigger price is required to be set which will always be higher than what the trader paid first. This means, the trader will always sell the asset with a profit, no matter what is the initial price.

Take profit order is a special type of order which can be used to close the trade with good profits. This is a kind of standing order which is used to sell a crypto asset once it reaches the preset price. Selling the crypto asset at this price ensures that the trader will earn a profit on his trade. This order type is used to lock-in your profits in a long and short position in different ways. Multiple strategies are there which traders can use with these orders like risk-reward ratio, chart pattern, support and resistance, etc.

Take Profit strategies have also become quite popular among traders who place shortterm trades. This order type closes the open position of the trader for a profit whenever it reaches the predefined value/price of the profit. Setting a take profit order on popular crypto trading platforms like TrailingCrypto allows its traders to place such orders automatically.

Example: Let’s understand this order type with an example: Tom buys a crypto asset XYZ at $10,000, and puts take profit value +10% which means, he has created an order to sell the asset XYZ at a price of $11,000.

For some time, XYZ has traded within the range of $10,000, and then continued to grow. Upon reaching the level $11,000 or above, your pending order with take profit +10% will be filled, and the system will close the trade with a sell order.

Here your total profit comes out as $1000.

So, it’s a kind of pending order which is used to close a profitable position once it is set to the predefined price. The best crypto trading platform allows its traders to automate the trade using this order type as an exit strategy based on the profit-loss calculations.

This order type will help you to minimize the risk and earning profits. Automating the trade by making use of crypto trading bots will execute the orders instantly without tracking the performance manually.

But apart from this order type, there is one more strategy that traders may consider i.e.

Trailing take profit.

How take profit order works?

Most frequently the traders use this order type in combination with the stop-loss orders so as to limit their losses and maximize their gains on the trade. Take profit orders are also popular as limit order and sell limit orders among the crypto traders.

For a buy order, the trader may set the profit price just below the current market price of the asset. And, for the sell order, he needs to set the profit price above the market price

of the asset. The profit price can be set in terms of absolute price or percentage as per the trader’s choice.

Another example: Let’s Say, a trader has 1000 coins of any asset ABC purchased at $500 per coin. The trader believes that its price will go up in a few days, so he will put a take profit order on this which specifies that if the price reaches to $600 per coin, a sell order with a profit will be triggered immediately.

So, this order type allows the traders to limit their risk or exposure to the market by exiting the trade as soon as it shows a favorable take profit price for them Setting this order type requires good market research and technical analysis of the crypto asset’s price/value from the traders along with the considering the movement of the market which include chart pattern analysis, daily or weekly pivot point, and average true range.

And, all this is not possible without any kind of expert knowledge. So, you need to watch the changing market trends continuously, but setting up a crypto trading bot will automate your trades and lets you earn profits.

When a trader must use this order?

This order type is best used with the short-term strategy. You may exit the trade as soon as you hit your profit target, without letting your gains slip away and minimizing the risks.

So, you can’t avoid using advanced orders like take profit orders so as to maximize your gains and reduce your losses. This is the best risk management tool used by all the expert and intermediate traders. One can also use crypto signals provided by the best trading platforms and earn smartly.

For more information visit https://www.trailingcrypto.com/