BTC Markets is pleased to introduce stop orders, a new advanced order type, now available on our exchange platform.
Volume: The amount of cryptocurrency being bought or sold.
Stop: A price condition, which once met, places a trade to buy or sell
Price: The price is the market value of the asset when the stop is triggered.
What is a stop order?
A stop order allows a trader to automatically place a ‘market order’ in the order book once the ‘stop’ price has been met. The order will execute at the market price until it is fully matched or until there are no other orders to be matched against.
How to place a stop order
- In the volume field enter the amount being sold.
- In the stop field, enter the price at which the stop is activated.
- Select ‘Sell BTC’ and review the order.
- Once the order has been evaluated and the conditions of the stop order understood, select ‘confirm’ to place the stop limit order.
Please note: You can cancel a stop order by clicking the cancel button to the left of the open order section. Please note, you can only cancel your stop prior to triggering.
Example: Alex purchased 1 Bitcoin at $6,000 and wants to set a stop order for the following condition; if the price reaches $5,700, sell 1 Bitcoin at market price.
Once Alex has confirmed the order it will appear in the open orders as a stop order.
A day later, the price has dropped to $5,700. The above condition or ‘stop’ has been met and the stop order to sell 1 Bitcoin at the market price has been placed in the order book.
The order will now act like any other market order and will execute until the order is fully matched.
Why use a stop order?
Stop orders can be used as a risk management method to protect investments. They can only be set below the current market price. Say you buy Bitcoin at $6,000. Once the buy order is confirmed and settled, a trader could set a stop order at a price below their entry price to minimise losses. If the market price goes above the trader entry price, a stop order could be set above the entry price (but below that market price) to lock in profits.
Stop orders offer you an enhanced trading experience but as always, please trade safely, and if you have any questions don’t hesitate to reach out to our Support Team.