Cheers once again all, this is a really good discussion and I'm learning a ton.
I've moved to a more manual approach, and tbh, i just set my staggered sell limits and leave it now. I'll buy in more good coins as my sales trigger.
Topic: Stop losses - bitter sweet relationship (Read 213 times)
Binance adding stop losses to the API was meant to be legendary, now i feel like its a curse. Set it too high, it triggers early and the coin may still thrive. Set it low and boom, you cash out after a huge loss...
Any advice regarding the levels you set?
Any advice regarding the levels you set?
I would say you should use it very sparingly, for a doomsday scenario. Stop losses are not meant to be triggered often. If they are getting triggered, you should investigate what is wrong with your trading strategy.
My view - set it low. You cash out at a big loss, but you don’t do this often.
Sparingly, yes indeed but I would say try to do the trading on your own so that you can put some meaning in it. Stop-loss is always bitter thing and it can cut down the profitability over the time. You know how? Most of the time we set up few % loss to be taken but if you do that manually then you can just wait longer though the loss is bigger. Many times crypto starts itself pulling back and you can have more profits. If in the current scenario if someone had put the stop loss then they are the most unlucky one to leave the market immediately. I mean manual holder like me still holding the trade and I am completely in profit after seeing that market has pumped a lot now days. So be careful while using that tool.
I appreciate the responses, cheers guys!
The stop loss tool is sometimes makes you smile and happy without the decision when it actually continues to dip even after it gets triggered off and on the other hand, it leaves a bitter taste in user mouth when it just hits it and reverts back
By then, you would have been logged out of the market.This has been my experience excatly! I often use it and slowly push it up as i move more into profit with the intention that it only closes when the upward trend ends and a correction begins for example. But a manipulated, volatile market makes it trigger far too often at times, locking in hideous losses for no good reason.
Binance adding stop losses to the API was meant to be legendary, now i feel like its a curse. Set it too high, it triggers early and the coin may still thrive. Set it low and boom, you cash out after a huge loss...
Any advice regarding the levels you set?
Any advice regarding the levels you set?
I would say you should use it very sparingly, for a doomsday scenario. Stop losses are not meant to be triggered often. If they are getting triggered, you should investigate what is wrong with your trading strategy.
My view - set it low. You cash out at a big loss, but you don’t do this often.
I appreciate the responses, cheers guys!
The stop loss tool is sometimes makes you smile and happy without the decision when it actually continues to dip even after it gets triggered off and on the other hand, it leaves a bitter taste in user mouth when it just hits it and reverts back
By then, you would have been logged out of the market.
Well,yeah indeed that is the case. But whats the use of the tool if we are going to use it "automation + you watching" way as you are suggesting here. I mean stop-loss should give you more me time and thats why it has been created in the first place. We can just set the limits and go away from the trading to do rest of the stuff. Sometimes these trades could last for days to achieve our limits and sometimes they can get closed ASAP as we overcome the set loss. Well, we really dont have any option in that as neither we can control the way market is fluctuating nor we can debate on the binance tool that has been created.I don't really use this quite often. Especially now that the market has gone really low below the buy amount for most of my coins. I use the stop loss when for example my target sell point is .0005 and my buy is .0001 so i set my stop loss at .003 if the current sell is .004. so incase the market goes down and does not reach my target sell point, i will still gain even if not as much as my target but it avoids me from losing.
the problem lies with the market not the tool.
altcoins are extremely volatile and being manipulated pump and dumps makes things even worse. it is sometimes nearly impossible to set a stop loss for an altcoin since you may see a huge dump in matter of seconds before they pump the coin to the moon.
there unfortunately is no solution of it either. i find that for altcoins a combination of automation + you watching everything yourself is the best solution for it. also i try to not stick around in altcoins that much to get caught with my pants down
altcoins are extremely volatile and being manipulated pump and dumps makes things even worse. it is sometimes nearly impossible to set a stop loss for an altcoin since you may see a huge dump in matter of seconds before they pump the coin to the moon.
there unfortunately is no solution of it either. i find that for altcoins a combination of automation + you watching everything yourself is the best solution for it. also i try to not stick around in altcoins that much to get caught with my pants down
Yeah indeed that is the case. But whats the use of the tool if we are going to use it "automation + you watching" way as you are suggesting here. I mean stop-loss should give you more me time and thats why it has been created in the first place. We can just set the limits and go away from the trading to do rest of the stuff. Sometimes these trades could last for days to achieve our limits and sometimes they can get closed ASAP as we overcome the set loss.
Well, we really dont have any option in that as neither we can control the way market is fluctuating nor we can debate on the binance tool that has been created.
Once again, thx for the responses. I clearly use them too much...
I don't really use this quite often. Especially now that the market has gone really low below the buy amount for most of my coins. I use the stop loss when for example my target sell point is .0005 and my buy is .0001 so i set my stop loss at .003 if the current sell is .004. so incase the market goes down and does not reach my target sell point, i will still gain even if not as much as my target but it avoids me from losing.
Binance adding stop losses to the API was meant to be legendary, now i feel like its a curse. Set it too high, it triggers early and the coin may still thrive. Set it low and boom, you cash out after a huge loss...
Any advice regarding the levels you set?
Any advice regarding the levels you set?
If you are planning to hold the coin for the long term then stop loss may not be needed because when it dips, you just have to buy more so that you can average down since you believe that the coin would one day go too the moon. If you are trading for it for the short term then stop loss is important so that you can prevent from being a holder because you cannot sold it early. You just have to remember that it takes a higher percentage to go up than the price to go down.
For example, if the price went down 10% then the price should rise up again 11% so that you can break-even. If the price went down 50% then it should rise up 100% for you to break-even again. The more it dips, the harder it is to recover again in a short period so it would be better to have a stop loss maybe around 10% and wait for it to reach a potential support and buy again.
I don't ever use stops, ESPECIALLY on crypto exchanges. First of all, in regulated markets such as stock exchanges, big players trying to buy/sell large lots can push the market to trigger stops and thus purchase/sell at favorable prices. Stops are more or less standard where they are placed so it doesn't take a genius to guess where to find them.
Second, the crypto markets are unregulated. Who knows who has access to the exchange data? Is someone paying for access to this information? Is the exchange itself using this information to their benefit? If a trader had the stop data available, they could easily use this to trigger them. I see strange trades on the markets often, usually it looks like spoofing, but also there are ultra fast price movements and recoveries. This is likely all done by bots. In any case there is too much money at stake to assume that stop loss data is not being exploited, and there is even evidence of it happening.
Stops are only good for locking in losses. Instead use price alerts, invest in solid coins that have good long term prospects so that short term movements can be ignored if necessary, or just cash out at the end of your trading day.
Second, the crypto markets are unregulated. Who knows who has access to the exchange data? Is someone paying for access to this information? Is the exchange itself using this information to their benefit? If a trader had the stop data available, they could easily use this to trigger them. I see strange trades on the markets often, usually it looks like spoofing, but also there are ultra fast price movements and recoveries. This is likely all done by bots. In any case there is too much money at stake to assume that stop loss data is not being exploited, and there is even evidence of it happening.
Stops are only good for locking in losses. Instead use price alerts, invest in solid coins that have good long term prospects so that short term movements can be ignored if necessary, or just cash out at the end of your trading day.
In my opinion, using a stop-loss as a normal part of trading is a poor practice for these reasons.
I believe that the only time a stop-loss is useful is when you can't access the market or you can't make decisions, though I don't know why someone would trade if they are in that situation.
- 1. A stop-loss restricts your decision-making ability. You are deciding when to trade based on old information and ignoring any new information.
- 2. A stop-loss is susceptible to manipulation and flash crashes.
- 3. Contrary to popular misconception, a stop-loss does not execute at the price you pick.
- 4. A stop-loss is literally "buy high, sell low".
I believe that the only time a stop-loss is useful is when you can't access the market or you can't make decisions, though I don't know why someone would trade if they are in that situation.
I appreciate the responses, cheers guys!
the problem lies with the market not the tool.
altcoins are extremely volatile and being manipulated pump and dumps makes things even worse. it is sometimes nearly impossible to set a stop loss for an altcoin since you may see a huge dump in matter of seconds before they pump the coin to the moon.
there unfortunately is no solution of it either. i find that for altcoins a combination of automation + you watching everything yourself is the best solution for it. also i try to not stick around in altcoins that much to get caught with my pants down
altcoins are extremely volatile and being manipulated pump and dumps makes things even worse. it is sometimes nearly impossible to set a stop loss for an altcoin since you may see a huge dump in matter of seconds before they pump the coin to the moon.
there unfortunately is no solution of it either. i find that for altcoins a combination of automation + you watching everything yourself is the best solution for it. also i try to not stick around in altcoins that much to get caught with my pants down
Technically you should set the stop lose a bit lower then a support level, so if this support level is being broken, you won't lose a lot of value.
But what really happens in the crypto market, is that most of the whales know about those stoploses and they are professional market manipulators, they will make the price go below the support level, so many stop loses will be triggered and they will be able to get rid from weak handed investors and also to get cheap coins.
I would stay away from stop loses when it comes to so easy to manipulate cryptocurrency markets.
But what really happens in the crypto market, is that most of the whales know about those stoploses and they are professional market manipulators, they will make the price go below the support level, so many stop loses will be triggered and they will be able to get rid from weak handed investors and also to get cheap coins.
I would stay away from stop loses when it comes to so easy to manipulate cryptocurrency markets.
Well, in a market as volatile as btc has been, your stops will be hit quite often. But I definitely recommend using them for all short-term trades. Now, if you are HODLing and are just waiting for a crypto to gain value over time, then maybe a stop-loss isn't totally necessary, but there should be a point where you would say you're not interesting in continuing and set the stop-loss there and deal with the loss, so as to avoid an even bigger loss.
As for short-term trades, from a risk management perspective, the only thing you can really do is to put less money into a trade to account for the risk of having a huge stop-loss. This is probably not the way most crypto traders think or something they would want to do. I have not actively traded cryptos short-term to be honest, so I don't know how successful chart patterns are in these markets, but each one has a certain suggested stop-loss that I would use.
As for short-term trades, from a risk management perspective, the only thing you can really do is to put less money into a trade to account for the risk of having a huge stop-loss. This is probably not the way most crypto traders think or something they would want to do. I have not actively traded cryptos short-term to be honest, so I don't know how successful chart patterns are in these markets, but each one has a certain suggested stop-loss that I would use.
Binance adding stop losses to the API was meant to be legendary, now i feel like its a curse. Set it too high, it triggers early and the coin may still thrive. Set it low and boom, you cash out after a huge loss...
Any advice regarding the levels you set?
Any advice regarding the levels you set?
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