Stop Loss and Take Profit orders can be set for positions. Like ordinary limit orders, they are orders to Buy or Sell when the price moves past a particular point. Both stop loss and take profit orders are opposite to the direction of the position and are set to a size that would cancel the position if executed.
A stop loss order is used to limit the potential loss incurred by a position. If the position direction is Buy, the stop loss level is set to a price lower than the open price of the position (and higher if Sell). Reaching the stop loss level would result in the position closing at a loss, but this prevents further losses from being incurred.
A take profit order is used to automatically close a position when it accrues a certain amount of profit. If the position direction is Sell, the take profit level is set to a price higher than the open price of the position (and lower if Buy). Reaching the take profit level would result in the position closing at a profit.
Both stop loss and take profit orders can be set in three different ways on Contract Market:
- Using points away: Enter the difference in points between the open price and the stop loss or take profit level. This may be useful if you need to maintain a fixed distance between the stop loss or take profit level and the open price.
- Using price: Enter the stop loss or take profit price level that you wish. Note that the stop loss price cannot be higher than the open price of a Buy position or lower than the open price of a Sell position. The opposite applies to the take profit level.
- Using profit or loss: Enter the amount of profit or loss (PnL) you're willing to gain or tolerate for the position in USDT.