Mastering Take-profit and Stop-loss Orders in Futures Trading

What are take-profit and stop-loss orders? 

Take-profit and stop-loss orders are critical risk management tools used by traders in the futures markets where they set specific trigger conditions, order amounts, and quantities upon taking a position. When the market price matches the trigger conditions set by the trader, the order amount and quantity will be activated and placed in the market. Such orders are typically placed in the name of risk control.

Take-profit and stop-loss orders are essential for futures traders, allowing timely realization of profits when trades are favorably aligned, and preventing excessive losses or forced contract liquidation when trades are unfavorably aligned. Developing a clear understanding of take-profit and stop-loss strategies and effectively managing risks are crucial for market survival.

You can set up take-profit and stop-loss orders on BTSE’s futures trading panel based on your trading preferences.

How to Set Up Take-profit and Stop-loss on BTSE’s Trading Panel 

1. Navigate to the futures trading page.

2. To illustrate, let's consider setting a stop-loss for a long position. On the trading panel, click on the "Advanced" option on the trading panel and find "Stop-Limit". The first "Price" field represents the price at which you wish to place the order once the trigger price is hit. The "Stop Price" is the market price that matches your established trigger price and initiates the order. The "Size" represents the number of contracts you wish to implement stop-loss on.

3. Please note that if you only wish to reduce your position, ensure the "Reduce Only" box is ticked. If left unticked, the system will place the order with the price and quantity you have set. Furthermore, the platform offers criteria for trigger price assessment, allowing traders to choose between using the mark price or the last price as the trigger condition.

4. The same steps are applicable when setting up take-profit orders. Additionally, the system offers market price take-profit and stop-loss orders, helping traders place a market order when the trigger price is reached.

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