How to Put Trailing stop loss in Binance: The Complete Guide

A “trailing stop loss” is an order to sell an asset when it drops below a certain price. This is different from a regular stop-loss order, which sells an asset when it reaches a certain price. A trailing stop loss order can help you lock in profits and limit losses. In this article, we’ll show you how to use Binance’s trailing stop loss.

What is a trailing stop loss?

A trailing stop loss is a type of order that allows a trade to remain open and continue to profit as long as the price moves in the trader’s favor, but automatically closes the trade if the price moves against the trader by a certain amount. For example, a trader who is long on a stock may set a trailing stop loss at $50,

which means that the trade will remain open as long as the stock’s price remains above $50. But if the price of the stock drops below $50, the trailing stop loss will close the trade automatically, limiting the trader’s possible losses.

A trailing stop can be a useful tool for traders who want to maximize their profits while still protecting their capital.

The trailing stop is designed to protect investors from large losses if the stock price falls sharply. It can also be used to lock in profits if the stock price rises.

Using a trailing stop loss has several advantages. First, it takes the emotion out of the equation.

How to set up a trailing stop loss on Binance

A trailing stop is an order to buy or sell an asset when it reaches a certain price. This type of order is often used by investors who want to limit their losses on a stock that has been falling in value. A trailing stop can also be used to protect gains on a stock that has been rising in value.

To set up a trailing stop on Binance, first log into your account and go to the “Exchange” section. Then, find the asset you want to trade and click on the “…” button next to it. A pop-up menu will appear; select “Trailing Stop” from this menu.

In the Trailing Stop dialog box, enter the percentage you want to use for your trailing stop.

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Why use a trailing stop loss?

A trailing stop loss is a type of order that allows a trade to remain open and continue to profit as long as the price moves in the trader’s favor, but automatically closes the trade if the price moves against the trader by a certain amount.

This can be useful for a number of reasons. For example, a trailing stop loss can help a trader lock in their profits on a trade that is moving in their favor while still allowing the trade to remain open in case the price continues to move in their favor. It can also help protect a trader’s capital by automatically closing a trade if the price moves against them by a certain amount, limiting their potential losses.

Overall, a trailing stop loss can be a useful tool for traders who want to maximize their profits while still protecting their capital.

How does a trailing stop loss work?

A trailing stop loss is an order that you place with your broker to automatically sell your position if the market price falls below a certain level. This level is typically set at a percentage below the current market price, and the trailing stop will adjust as the market price moves up.

For example, say you buy shares of XYZ stock at $50 per share. You might place a trailing stop loss order with your broker at 10% below the current market price. So, if the price of XYZ stock falls to $45 per share, your broker will automatically sell your shares.

Trailing stop losses can be a helpful tool for investors who want to limit their downside risk while still allowing for upside potential.

Pros and Cons of a trailing stop loss

A trailing stop loss is a type of stop-loss order that adjusts automatically with the changing price of a security. 

What are the benefits of a trailing stop loss?

A trailing stop loss has a number of potential benefits for traders. Some of the key benefits of a trailing stop loss include:

1. Locking in profits: A trailing stop loss allows a trade to remain open and continue to profit as long as the price moves in the trader’s favor. This means that a trader can lock in their profits on a trade that is moving in their favor, without having to manually close the trade.
2. Protecting capital: A trailing stop loss can also help to protect a trader’s capital by automatically closing a trade if the price moves against them by a certain amount. This can help to limit the trader’s potential losses on a trade.
3. Managing risk: By automatically closing a trade when the price moves against the trader by a certain amount, a trailing stop loss can help a trader to manage their risk and avoid taking on excessive losses.
4. Simplifying the trading process: Using a trailing stop loss can help to simplify the trading process, as it allows the trader to set their desired stop loss level and let the order execute automatically. This can save time and effort compared to manually managing stop loss orders.

Overall, a trailing stop can be a useful tool for traders who want to maximize their profits while still protecting their capital.

Conclusion

In conclusion, a trailing stop loss is a great tool for investors because it allows them to lock in profits, limit losses, and manage their overall risk. While there are no guarantees in the stock market, a trailing stop loss can help you succeed.

It is important to remember that a trailing stop loss is not a guaranteed way to make money, but it can help you limit your losses and maximize your profits.