Instructions on KuCoin Trailing Stop Orders
24/07/2023 11:25:21
Dear KuCoin Users,
To help users maximize their profits, KuCoin supports trailing stop orders under advanced order types. With trailing stop orders, users can lock in profits and reduce losses. When prices move in a favorable direction, the trailing stop order will move the trailing stop to lock in profits. When prices move in an unfavorable direction, the trailing stop order will buy or sell to reduce losses.
More specifically, a buy trailing stop order would consist of the following four parameters: activation price, trailing delta, buy price, and quantity.
The activation price and trailing delta are condition parameters. When the market price and price pullback satisfy the activation price and trailing delta conditions set by the user, the trailing stop order will buy the target asset in accordance with the buy price and quantity parameters set by the user.
Activation Price
When the price of the asset reaches the activation price, the trailing stop order will be activated. Otherwise, the trailing stop order will remain inactive until the activation price is reached.
For buy trailing stop orders, the activation price must be lower than the current market price, so that when the price falls to the activation price, the trailing stop order will be activated. Once activated, the trailing stop order will continually track the lowest market price.
For sell trailing stop orders, the activation price must be higher than the current market price, so that when the market price rises to the activation price, the trailing stop order will be activated. Once activated, the trailing stop order will continually track the highest market price.
The activation price is optional. If the user does not specify an activation price, It will default to the current market price.
Trailing Delta
The trailing delta refers to the maximum price pullback allowed relative to the highest or lowest price recorded by the trailing stop order. The trailing delta is a required parameter, with its value ranging from 0.1% to 20%.
Buy Price / Sell Price
The buy price or sell price used for the limit order when the trailing stop order is triggered.
Quantity
The quantity used for the limit order when the trailing stop order is triggered.
Buy trailing stop orders are activated when the market price falls to the activation price. Once activated, the trailing stop order will continually track the lowest market price (A) of the asset and compare it with the current market price (B). If [(B - A) / A] reaches or exceeds the trailing delta, the trailing stop order will be triggered, and the “buy price” and “quantity” parameters specified by the user will be used to place a buy limit order.
Sell trailing stop orders are activated when the market price rises to the activation price. Once activated, the trailing stop order will continually track the highest market price (C) of the asset and compare it with the current market price (D). If [(C - D) / C] reaches or exceeds the trailing delta, the trailing stop order will be triggered, and the “sell price” and “quantity” parameters specified by the user will be used to place a sell limit order.
Note:
- Trailing stop orders can be canceled at any time.
- Based on the buy price or sell price, if there are insufficient funds for buying or selling the asset, the triggering of the trailing stop order will fail.
- If the trailing delta is too large, a relatively large pullback in price would be required to trigger the trailing stop order. If the trailing delta is too small, even slight fluctuations in price could trigger the trailing stop order. Therefore, finding the right trailing delta value is important for being able to maximize profits and minimize losses. When trying to find the most optimal trailing delta value, market conditions and price volatility should be taken into account.
Risk Warning: KuCoin Earn is a risk investment channel. Investors should be sensible in their participation and be aware of investment risks. The KuCoin Group is not liable for users’ investment gains or losses. The information we provide is for users to conduct their own research. It is not investment advice. The KuCoin Group reserves the right to the final interpretation of the activity. Kucoin is not responsible for any loss of assets caused by the user's own investment decisions or related behaviors, and the user should assume full responsibility.
Thank you for your support and understanding!
The KuCoin Team
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