How To Set A Stop Loss On Coinbase

One of the most popular American-based cryptocurrency exchanges is Coinbase Pro, formerly known as GDAX. It has all the necessities a trader needs to buy and sell diverse cryptocurrencies. Buy and sell orders are easy to sympathize, but one of the more circuitous order types is called a end order. In this guide, we'll show you lot how to place a terminate-loss lodge on Coinbase Pro.

Does Coinbase Pro back up Stop Orders?

Yes, Coinbase Pro does support stop-loss orders. A stop-loss is a conditional order that triggers at a given price. These order types are for automatically selling your crypto if it drops below a given price. The idea is that when the price drops below a certain level, information technology may keep going. In this scenario, you might want to stop your losses.

How to Place a Stop Loss Guild on Coinbase Pro

To place a stop-loss order, you lot'll need to have an open position. Modify the order type from Purchase to Sell and select the Stop tab. Y'all will see 3 fields, and here'south what they mean:

• Stop Price: price at which the order triggers
• Amount: amount you want to sell
• Limit Cost: the price at which you volition sell

The nearly confusing part virtually a stop-loss order is understanding the difference betwixt the cease price and the limit price. In one case yous grasp that concept, it will all make sense.

Two prices are necessary considering 1 is the trigger (stop), and the other is your desired price to sell (limit). When the price is dropping, it tin happen very quickly and violently—having an automated mode to sell your position can event in fewer losses.

For finish-loss orders, you will desire to prepare your limit price slightly below the stop price. The reason is because of something known as slippage. In some scenarios, the price tin driblet below your stop price if there are no buyers in that range. That'southward where the limit price comes into play.

Hypothetical Instance

In a hypothetical scenario, I take 1 Bitcoin, and the current cost is $51,000. I feel that if the price were to drib below $fifty,000, it would go much lower. Then, if information technology drops below $fifty,000, I want to sell my Bitcoin, simply I tin't sit hither and stare at the chart all twenty-four hours long.

Instead, I'll set up a cease-loss guild. My end price will be $49,990, meaning if Bitcoin hits this price, my order volition trigger. Other people probably take the same idea, so I'll requite myself some cushion and fix my limit price to $49,950. In other words, if Bitcoin reaches $49,990, I will automatically place an society to sell my Bitcoin for $49,950.

"But you're losing $l! Why not but sell at $l,000?"

Well, I believe $50,000 is a spot where Bitcoin could get to simply then immediately get support. I would be disappointed about selling my Bitcoin if that happened. I only want to sell if the price drops below that point, hence the $49,990 terminate price. My $49,950 limit price gives me a $40 absorber to increase the odds that my society goes through and doesn't get skipped over.

Source: https://techozu.com/how-to-place-a-stop-loss-order-on-coinbase-pro/

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