Stop-Loss and Take-Profit

Effective trading requires managing risk and knowing when to exit. OrbDex provides Stop-Loss and Take-Profit orders, which are essential tools for risk management:

• Stop-Loss Order: A Stop-Loss order automatically closes your position when the market price reaches a specified level that is less favorable to you. It “stops” further losses by exiting the trade. For a long position, the stop-loss price is set below your entry (since a price drop causes losses for longs). For a short position, the stop-loss is set above your entry (since a price rise causes losses for shorts). When the stop price is hit, a market order (or sometimes a limit order at the stop price, depending on platform mechanism) is triggered to close your position. This ensures you don’t lose more than a predetermined amount if the market moves sharply against you.

• Take-Profit Order: A Take-Profit order automatically closes your position when the market moves in your favor up to a specified price, securing your profit. For a long position, the take-profit is set above the entry price; for a short, it’s below the entry. When that price is reached, the system will execute an order to close the position, thereby “taking” your profit. This is useful for locking in gains at a target without needing to watch the market constantly.

Setting Stop-Loss/Take-Profit: As covered earlier, OrbDex allows you to set these orders at the time of opening a position by entering the desired prices in the order form. If you skipped that step or want to adjust later, you can typically add a stop-loss or take-profit to an existing position by creating the corresponding order manually: - To add a stop-loss after a position is open, place a stop order for the opposite direction of your trade. For example, if you are long 1 BTC, you’d place a sell stop order at your desired stop-loss price for 1 BTC. On OrbDex, this might be done via an “Advanced” order option where you specify a stop trigger. - To add a take-profit after a position is open, place a limit order in the opposite direction at the take-profit price (this is effectively the same as a target limit order to close the position).

After placing them, you will see your stop-loss and take-profit orders listed in the Open Orders panel, usually marked as a special order type (often called “Stop” or “TP/SL”). They remain inactive until the trigger price is reached.

Modifying or Canceling: You can adjust your stop-loss or take-profit by canceling the existing order and placing a new one with the updated price. It’s important to keep your stop-loss at a level that reflects your risk tolerance – too tight and you might get stopped out by normal market noise; too wide and you could suffer large losses. Many traders adjust stop-loss levels as the market moves (for instance, trailing a stop-loss upward as price rises in a profitable long trade).

Stop-Loss and Take-Profit orders are there to protect you and secure profits, but they are not foolproof. In very volatile or illiquid markets, the execution price can slip past your set level (resulting in a slightly worse fill price). However, using these orders is far better than leaving a position entirely unprotected. Always set a stop-loss on leveraged trades – this ensures you live to trade another day even if a trade goes wrong.