How Do I Calculate Stop Loss Bitcoin Order for Bitcoin Trading

How to Put Stop Loss BTCUSD Crypto Currency Order

Stop Loss BTCUSD Crypto Currency Order is a type of trade order which's placed after opening a btcusd crypto currency trade that is meant to minimize losses if the bitcoin market trend goes against you.

Stop Loss Bitcoin Order is a pre-determined point of exiting a losing bitcoin trade and it's meant to control losses in cryptocurrency.

A stop loss bitcoin order is an order placed with your bitcoin broker which will automatically close your open bitcoin trade when the bitcoin price of your open trade order reaches a predetermined bitcoin price. When set level is reached, your open trade is liquidated.

These orders are meant to restrain the sum of money that one 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 btcusd crypto currency trade & put a stoploss order of 20 pips, if the bitcoin price moves against the trader by 20 pips the stop loss cryptocurrency order will be filled & the trade will be liquidated therefore limiting the loss to 20 points (pips) - How Do I Set StopLoss Bitcoin Orders Examples.

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

One of the more difficult things in btcusd crypto currency trading is setting these stop loss btcusd crypto currency orders - How to Calculate Stop Loss Order - How Do I Set StopLoss Bitcoin Order. Put the stop loss cryptocurrency order too close to your entry bitcoin price and you're liable to exit the bitcoin trade due to random bitcoin market volatility. Place the stop loss crypto order too far away and if you are on the wrong side of the btcusd crypto currency trend, then a small loss could turn into a big loss.

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

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

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

Unexpected bitcoin economic news can come out of the blue and dramatically affect the btcusd crypto currency price: this is why it's so important to have a stoploss order crypto order set for your open bitcoin trade. It is best to cut bitcoin losses early when a bitcoin crypto currency trade 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 - How to Calculate Stop Loss Bitcoin Order for Bitcoin Trading.

How to Place Stop Loss BTCUSD Order in Bitcoin Trading

A key bitcoin question is exactly where to place this stoploss order crypto order. In other words, how far should you place this bitcoin crypto currency stoploss below your purchase btcusd crypto currency price? Many bitcoin traders will tell you to set predetermined - maximum acceptable loss per bitcoin trade, an amount based on your bitcoin equity balance rather than use bitcoin indicators for calculating where to place stop loss cryptocurrency order - How Do I Set StopLoss Bitcoin Order.

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

If you opened a bitcoin trade then that would mean you'd limit your risk to no more than $200 for that particular bitcoin 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 the bitcoin trade that you've opened - How to Put Stop Loss Bitcoin Order in Market - How to Put Stop Loss Bitcoin Order. The topic of bitcoin risk management is a wide topic and it's explained under learn bitcoin equity management trading topics.

How to Put Stop Loss BTCUSD Order

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

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

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

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

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

3. BTCUSD Crypto Currency Risk to Reward Ratio - this is measure of potential risk to reward calculated before opening a btcusd crypto currency trade. If the btcusd crypto currency market conditions are favorable then it's possible to comfortably give your btcusd crypto currency trade more room. However, if the bitcoin crypto market is too choppy it then becomes very 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 look for a better bitcoin trade transaction to next time.

4. BTCUSD Crypto Currency Trade Position Size - if btcusd crypto currency trade position size opened is too big then even the smallest decimal btcusd crypto currency 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 transaction size so as to give your bitcoin trade more space for fluctuation, by setting a reasonable bitcoin stoploss order level for this stoploss order cryptocurrency order while at the same time reducing the btcusd crypto currency risk for the btcusd crypto currency trade.

5. BTCUSD Crypto Currency Trading Account Equity - 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 bitcoin trade transaction which will force you to set very tight stoploss order cryptocurrency orders. If this is case, you should think seriously about whether you have enough capital to trade Crypto in the first place.

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

7. BTCUSD Crypto Currency Timeframe - the bigger the btcusd cryptocurrency time frame you use, the bigger the 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 btcusd crypto currency day trader or a btcusd crypto currency swing trader. This is because if you're using longer timeframes & you figure out the bitcoin price will move up it does-not make any sense to set a very tight stop because if the bitcoin price swings a little, your open order will be hit.

How to Place Stop Loss Bitcoin Order in Bitcoin Crypto Trading

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

How to Put Stop Loss Bitcoin Order

The lesson of how to set these stop loss bitcoin trade orders which you select should also follow the stop loss cryptocurrency order setting guide-lines above, even if not all these rules 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.

How Do I Calculate Stop Loss Order - How Do I Set StopLoss Bitcoin Order - How Do I Set StopLoss Bitcoin Orders Examples - How to Put Stop Loss Bitcoin Order in Market - How to Put Stop Loss Bitcoin Order

Study More Tutorials & Courses: