A trailing stop order is an order with a stop loss that trails the market price by a specified dollar amount or a percentage when the price moves in a favorable direction. When the price moves in the opposite direction, a trailing stop order protects the investor from rapid changes similar to a regular stop-loss order.
When should you use it?
Trailing stop orders are usually used when you have an open position, and you’d like to set at a certain percentage or amount above or below the current market price that is constantly revised as the market moves up/down. The trailing value can be set as a moving number (in USDT) or a trailing rate (in percentage).
How does a Trailing Stop Order Work?
Please note the below criteria for placing a trailing stop order:
- When placing a buy trailing stop order, the stop price will be lower than the market price; when placing a sell trailing stop order, the stop price will be higher than the market price.
- if your trigger price is more than the market price, the buy/long will be disabled; If your trigger price is less than the market price, the sell/short will be disabled.
Example 1:
You can place a sell order and set it below the market price like the below scenario.
A. When you have a position with 1 BTC priced at 32,000 USDT.
You create a trailing trigger order with:
- Trigger Price: 33,000 USDT
- Trailing value: 3,000 USDT
- Quantity: 1 BTC
B. Market price hits 33,000 USDT, the trailing trigger order is activated with stop price at 30,000 USDT (33,000 USDT - 3,000 USDT)
C. If the marked price drops to 33,000 USDT after rising to 35,000 USDT, the stop price remains at 32,000 USDT.
D. As the market price drops from 38,000 USDT to 35,000 USDT, the stop price of the trailing trigger order remains at 35,000 USDT. Once the market price drops to 35,000 USDT, the stop order is triggered and a market sell order is sent to the engine.
Example 2:
You can also place a buy order and set it above the market price like the below scenario.
A. You create a trailing trigger order with:
-
- Trigger Price: 37,000 USDT
- Trailing value: 3,000 USDT
- Quantity: 1 BTC
B. Market price hits 37,000 USDT, the trailing trigger order is activated with stop price at 40,000 USDT (37,000 USDT + 3,000 USDT)
C. The market price rises to 33,000 USDT, and the stop price remains at 35,000 USDT.
D. As the market price goes up to 33,000 USDT, the stop order is triggered and a market buy order is sent to the engine.
How to use Trailing-trigger orders?
Trailing-trigger orders can be used for both spot and futures, for order entry X (Adv) and order entry Z (Basic). You can set a trigger price to activate the order at your desired price. If no trigger price is entered, the trailing trigger will be activated automatically at the current market price.
Please note:
- When using trailing trigger in futures:
- You can put any numbers on the trailing value for moving number
- The trailing rate must be within 0.1% to 5% of the market price
- When using trailing trigger in spot:
- You can put any numbers on the trailing value for moving number
- The trailing rate must be within 1% to 20% of the market price.
- Trailing value & trailing rate:
- Trailing value: Please see the Max. and Min. trade amount at ▶ Trading Rules
- Trailing rate: 0.1% incremental
Order Entry X (Adv)
Order Entry Z (Basic)
After the order has been placed, you can still edit its quantity, trigger price or trailing amount/percentage in the open order tab. Once the order is activated, the trigger price will be grayed out indicating that it’s no longer editable.
How Trailing Stop Orders are shown on the Price Ladder widget:
Users cannot use the trailing stop on the Price ladder widget. If there are trailing stop orders, it’ll show ‘Tr-S’ to indicate it’s a trailing stop pending order.
If the trailing stop order is not yet activated, it’ll show the activation price. After activated, it’ll show the stop price.
If multiple orders (including Trailing Stop) get placed at the same price on the price ladder widget, the quantity will be the sum of all orders. When expanded, the trailing stop will show ‘Tr-S’ to distinguish against other types.