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Bitcoin Stop Loss Definition

Stop Loss BTC/USD Crypto Order Management

Stop Loss Bitcoin Order is a type of order which's placed after opening a bitcoin trade that's meant to cut losses if the btcusd market moves against you.

Stop Loss Bitcoin Order is a predetermined point of getting out of a losing bitcoin trade and it's meant to control losses in cryptocurrency.

A crypto stop loss bitcoin order is an order placed with your broker which will automatically close your open bitcoin trade when the bitcoin price of your open trade order reaches a predetermined bitcoin price. When the particular level is attained, your open btcusd crypto currency trade is closed out.

These orders are meant to limit the amount of money which a trader can lose: by exiting the bitcoin trade if a particular bitcoin price that's against the trade is reached.

For example, one might open a buy bitcoin trade and put a stoploss order of 20 pips, if the btcusd crypto currency price moves against the trader by 20 pips the crypto stop loss cryptocurrency order will be filled & the trade will be liquidated therefore limiting the loss to 20 points (pips) - Bitcoin StopLoss Definition.

Regardless of what you may be told by other traders, there's no question about if these crypto stop loss cryptocurrency orders should or shouldn't be used bitcoin stop loss bitcoin orders should always be used.

One of most advanced things in Bitcoin Trading is setting these crypto stop loss bitcoin orders - Bitcoin StopLoss Definition - Bitcoin StopLoss Example Bitcoin Trading. Put the crypto stop loss cryptocurrency order too close to your entry bitcoin price and you're liable to exit the bitcoin trade due to random volatility. Place the crypto stop loss cryptocurrency order too far away and if you're on the wrong side of the bitcoin trend, then a small loss could turn into a big loss.

Skeptics will point out several disadvantages of these crypto stop loss bitcoin orders: that by placing them you are guaranteeing that, should your open btcusd crypto currency trade position move in the wrong direction, you'll end up selling at lower bitcoin prices, not higher.

Skeptics also will argue that in setting crypto stop loss cryptocurrency orders you're susceptible to exit a bitcoin trade just before btcusd market heads in your favor. Most bitcoin traders have had the experience of setting a these crypto stop loss cryptocurrency orders and then seeing the bitcoin price retrace to that stoploss order bitcoin order level, or just a couple of points below it, and then go in direction of their original price trend analysis. What may have been a profitable bitcoin trading instead turns in to a bitcoin crypto currency loss.

Experienced bitcoin traders always use crypto stop loss cryptocurrency orders as they are an important part of discipline required to succeed in bitcoin trading because crypto stop loss cryptocurrency orders can prevent a small loss from becoming a big loss. What's more, by diligently placing these crypto stop loss cryptocurrency orders whenever you enter a bitcoin trade position, you end up making this important decision at point in time when you're most objective about what is really happening with btcusd cryptocurrency market, this is because most objective analysis is done before opening a bitcoin trade. After entering btcusd cryptocurrency market a trader will tend to interpret the btcusd cryptocurrency market differently because they have a bias toward one side of btcusd cryptocurrency market, the direction of their analysis - SL Order Example Bitcoin Trading.

Unexpected bitcoin trading economic news can come out of the blue & dramatically affect the bitcoin price: this is why it is so crucial to have a stoploss order cryptocurrency order set for your open bitcoin trade. It is best to cut bitcoin losses early when a bitcoin trade position is going against you, it's best to cut your bitcoin losses immediately rather than waiting for the loss to become a big one. Again, if you set your stop loss cryptocurrency orders when you're entering a trade, then that's when you're most objective as a trader - Bitcoin StopLoss Definition.

Bitcoin Stop Loss Definition

A key bitcoin trading question is exactly where to place this stoploss order crypto order. In other words, how far should you as a trader place this stoploss order below your purchase bitcoin price? Many bitcoin traders will tell you to set pre-determined - max acceptable loss per bitcoin trade, an amount depending on your bitcoin equity balance rather than use technical indicators for calculating where to place the crypto stop loss cryptocurrency order - SL Order Example Bitcoin Trading.

Professional money managers advice that you shouldn't lose more than 2 % of your bitcoin equity on any 1 single bitcoin crypto currency trade. If you have $10,000 in btcusd crypto currency capital, then that would mean that the max loss you should set for any one bitcoin trade is $200 - Bitcoin StopLoss Definition.

If you open a btcusd crypto currency trade then that would mean you'd limit your risk to no more than $200 for that particular btcusd crypto currency trade. In that case you would set your stop loss bitcoin order at 200 or the equivalent number of pips based on your bitcoin position size of bitcoin trade that you've opened - Bitcoin Stop Loss Meaning - Stop Loss Bitcoin Order Management - Bitcoin Money Management. The topic of bitcoin risk management is a wide topic & it's explained under learn bitcoin equity management tutorials.

Stop Loss BTC/USD Crypto Order Management

The most important question is how close or how far this stop loss crypto order should be set from the bitcoin price where you entered the bitcoin trade position. Where you set the crypto stop loss bitcoin trade order will depend on various factors:

Because there are no guidelines set in stone as to where you should place these crypto stop loss cryptocurrency orders on a chart, we follow general stop loss cryptocurrency order setting guide-lines used to help place these crypto stop loss bitcoin trading orders in the correct way.

Some of general crypto stop loss cryptocurrency order setting guide-lines used are:

1. Risk Percent - How much is one willing to lose on a single bitcoin trade. The general stop loss cryptocurrency order setting rule is that a btc usd trader should never lose more than 2 percentage of the total btcusd crypto currency account capital on any single bitcoin cryptocurrency transaction.

2. Bitcoin Trading Market Volatility -bitcoin-currency market volatility refers to the daily bitcoin price range movement of bitcoin instrument that you're trading. If bitcoin routinely moves up and down in a range of 50 pips or more over course of the day, then you can not set a tight stoploss order when you open a bitcoin trade. If you do, you'll be taken out of the bitcoin trade position by the normal market volatility.

3. Bitcoin Risk : Reward Ratio - this is measure of potential risk to reward calculated before opening a bitcoin trade. If the btcusd cryptocurrency market conditions are favorable then it's possible to comfortably give your bitcoin crypto currency trade more room. However, if the bitcoin crypto market is too range-bound it then becomes risky to open a btcusd crypto currency trade without a tight stoploss order - then do not make the btcusd crypto currency trade at all. The btcusd crypto currency risk : reward ratio isn't in your favor and even setting tight stoploss order cryptocurrency orders will not guarantee profitable results. It would be wiser to search for a better btcusd crypto currency trade position to next time.

4. Bitcoin trade Position Size - if the bitcoin tradingposition size transacted is too big then even the minimum decimal bitcoin price movement will be fairly large in risk percent% terms. This means that you have to set a tight stoploss order for your btcusd crypto currency trade which may be taken out more easily. In most cases it's better to adjust to a smaller bitcoin trade position size so that to give your bitcoin trade more room for fluctuation, by setting a reasonable crypto stop loss order level for this stoploss order cryptocurrency order while at the same time reducing the bitcoin risk for the bitcoin trade.

5. Bitcoin Crypto Currency Trading Account Equity Capital - If your account is under-capitalized then you will not be able to set your stop loss order crypto orders accordingly, because you will have a big amount of your money invested on one btcusd crypto currency trade transaction which will force you to set tight stoploss order cryptocurrency orders. If this is case, you should consider seriously about if you have enough capital to trade BTCUSD Crypto Currency in the first place.

6. Bitcoin Market Conditions - If the btcusd crypto currency price is trending upwards, a tight stop may not be necessary. If on the other hand the bitcoin price is choppy and has no clear trend direction then you should use a tight stop loss order or not open any transactions at all.

7. Bitcoin Time-Frame - the bigger the crypto chart time frame you use, the bigger the crypto stop loss bitcoin order level should be. If you were a scalper bitcoin trader your stop loss cryptocurrency orders would be tighter than if you were a day trader or a bitcoin swing trader. This is because if you're using longer timeframes & you figure out the bitcoin price will be moving-up it doesn't make sense to set a very tight stop loss because if the bitcoin price swings just a little, your open order will be hit.

Bitcoin Stop Loss Definition

The method of setting crypto stop loss bitcoin orders that you select will significantly depend on what type of btcusd crypto currency trader you are. Most common used technique to determine where to set stop loss cryptocurrency orders is - resistance and support areas. These bitcoin support and resistance areas give good points for setting these crypto stop loss cryptocurrency orders as they are the most reliable zones to set stop loss cryptocurrency orders, because the support & resistance areas will not be hit many times.

Stop Loss Order Bitcoin Crypto Order Management

The technique of how to set these crypto stop loss bitcoin trade orders which you select should also follow the crypto stop loss cryptocurrency order setting guide-lines above, even if not all these guidelines apply to your btcusd crypto currency strategy try to implement the rules which will apply to your btcusd crypto currency strategy depending on what type of trader you are.

Bitcoin StopLoss Definition - Bitcoin StopLoss Example Bitcoin Trading - Bitcoin StopLoss Definition - Bitcoin Stop Loss Meaning - Stop Loss Bitcoin Order Management - Bitcoin Trading Equity Management

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