Why trading with bracket orders is the most profitable approach in the crypto world?
The prices for the cryptocurrencies have shot up by more than 200-300% since their launch. There is substantial volatility in the crypto world and that’s great news for the traders looking for short-term profits. But the question is, how can one grab such an opportunity?
Here are a few tips:
The first thing that you need to understand while trading cryptocurrencies is the kind of risk it involves and how can you limit it. if you place 10 trades and out of them 5 turn out wrong, you can still make more money with the remaining 5, than what you have lost from the failed ones. Limiting risk is one of the best strategies which is best done with bracket orders available on the best crypto trading platforms like TrailingCrypto.
Let’s understand about bracket orders and how can these be used in upward and downward trends:
Bracket orders
Bracket order is a type of conditional order where you place a new trade along with an exit and stop-loss order. Once your main order is executed successfully, the system
places two more orders namely the one for booking profit and a stop-loss order. This will create a type of bracket of three orders.
And, whenever the take profit or stop-loss order is executed, the trade will come to an end. This will make the overall trading process automatic. A bracket order can be placed with a market or limit order with a stop-loss and trigger price. Instead of placing the normal stop-loss order, you can choose the trailing stop-loss order which will move your stop-loss price up and down as per the market movement.
This is one of the best methods used by crypto traders to manage their risks. The best crypto trading exchanges like BitMEX also support bracket orders with margin trading. This helps them to maximize gains while protecting the losses. Not many exchanges offer you margin or leverage, so you need to own the respective coin before selling. But on BitMEX platform which offers margin trading, the trader can use the complete margin amount to trade a larger quantity.
Why you need to use bracket orders?
Imagine a Scenario, where you are witnessing good volatility in the crypto market. Let’s take the example of BTC. Say you see it going from $4400 to $4375 and $4450 in a day. So you have an opportunity of earning $75.
In a normal scenario, you will place a buy order at $4375 and wait for it to get completed. Once it is completed, you can either place a stop loss order or can place a Sell order. First thing is that you can’t place both sell order and stop loss orders unless you use margin/leverage on it. Secondly, there are many exchanges which don’t even give you trailing stop loss. They only give you an option of setting a stop loss order. In such a case, the possibility of trading above the target becomes quite tough and timeconsuming, unless you are a full-time trader.
And, the answer to the above challenge is a simple Bracket order which is offered by TrailingCrypto now on global exchanges.
So if we look at the above example, here you can place a bracket with buy price of $4375 and sell at $4450 with stop loss at $4350 and trail at $25. Now in this case, let’s say your order was bought at $4375 and the price started to move in a predictable direction.
If it touches $4450, the sell order will be executed and profit will be booked. However, in the opposite situation, say the price increased from $4375 until $4425 but did not hit $4450 because the trailing stop loss value was at $25. The stop loss will be executed at $4400 so even in this case the trader will be able to make a profit of $25. Otherwise, this case would not have been possible.
So, using bracket order is invaluable in trading, as by employing multiple limit orders not only you can mitigate the trading losses and guarantee profits, but they can also protect the primary order. Here, if the primary order is filled, but the value doesn’t reach either limit order, then the trade and its value will be protected. And, if the primary order is not filled, and limit orders will not be triggered, all this means that the trader will not be selling off or buying the assets at a price which they do not want.
Apart from this, the third-party crypto trading terminals like TrailingCrypto is offering trading without needing to change the exchange or move their funds anywhere.
Benefits of using bracket orders
By bracketing a trade request with stop loss, trailing stop, and the target profit, the traders can easily secure their earnings and protect themselves from losses.
If one of the pre-specified conditions is met, a request to quitting the position will be sent automatically.
Let’s understand some other benefits of bracket orders:
1. Placing a bracket order reduces the risks to unbearable losses with the predefined stop-loss orders.
2. These orders allow traders to set the target profit value and stop-loss manually in one single order
3. Trailing stop loss option is also available there so as to increase your gains whenever the price moves in a favorable direction
4. These orders are automatic and gives complete protection to the traders
5. Automatic risk management is also offered
6. It offers maximum possible options available in any kind of order
Conclusion
Bracket orders are the tools which should not be missed out by any trader as they not only offer a degree of automation but these are the perfect ones to lock-in the profits.
For more information visit
https://www.trailingcrypto.com/