A Trailing Stop Market is an automated order feature tasked with "locking in" your profits. This feature works by following the coin's price upward but will automatically sell it if the price suddenly plunges down according to the percentage or nominal amount you have set. The result? Your profits are maximized without the hassle of constantly staring at charts. There are 3 Main Components:
Activation Price: This is the benchmark price for when this feature starts working. If left blank, the system will automatically use the current market price.
Distance/Trailing Delta: The exact distance in the form of a percentage (e.g., 10%) or nominal amount (e.g., $10) that you set from the highest price point (or lowest if you are short).
Automatic Execution: Once the market price reverses direction and hits that distance limit (delta), the system will immediately execute your sale (or purchase) at the current market price.
Simple Scenario Example
You buy a crypto coin at $100 and set a trailing delta of 10%.
The coin's price successfully skyrockets to a peak of $150.
Because of its "trailing" nature, your selling limit (stop price) automatically moves up to $135 (calculated as 10% below the $150 peak price).
Suddenly, the market reverses direction and the price plummets to hit $135.
The system instantly sells your coin. You successfully survive the loss and still pocket a 35% profit.
Main Advantages of the Trailing Market Feature
• Securing Profits: Gives your coin room to continue rising as high as possible, but ensures those profits are not lost when the market suddenly bleeds.
• No Upper Limit: Unlike a regular Stop Loss where the number stays in place, this safety limit will continue to rise along with the coin's price.
Risks to Remember
• Price Difference (Slippage): Because it is executed as a Market Order, when the market suddenly crashes (flash crash) or buyers are scarce, your coin might be sold at a cheaper price than you expected.
• Premature Selling (Whipsaw Exits): If you set the distance (delta) too tight (e.g., only 3%), your position could be closed simply due to a normal price correction, even though the coin's price skyrockets again afterward.
