How does stop loss and trailing stop loss work?

Trailing stop loss is intended to minimize the loss you would have in trading by 'trailing' or 'following' the price of a coin and determining when to stop based on whether the price has gone up or down.

You can quickly set up normal and trailing stop-loss on Mudrex. Read more about stop-loss and take profit.



How does it work?

1. Let us assume that you bought ETH at 100$ and set a stop loss of 10%.

2. This means that when the price reaches 90$ your stop loss will get triggered and trade will be closed. 

3. However, trailing stop-loss will not be a constant 90, but will continue to change based on how the price has moved.

4. If the price rises, the stop-loss value will grow, else it will remain the same. Thus enabling you to minimize losses.  

5. Below is an example of how stop losses changes with price as price moves


Start creating your trading strategies on Mudrex, without writing a single line of code.



Was this article helpful?
9 out of 10 found this helpful