Have you ever thought what is "Trailing Stop" feature on Binance?
Let me explain it with a practical example.
Imagine you buy LTC at 105$ market price and want to sell it for 107$.
• Its a 2 dollars jump, but at the same time you are somehow confident that it's likely that the LTC will go beyond 107 therefore why not to grab more benefit.
• It's here that your option of Trailing Stop comes in.
•
• Here you opt for DELTA.
• Trailing delta allows traders to lock in profits while still allowing for potential further gains if the market continues to move favorably. It's a feature used to help manage risk and maximize returns in volatile markets.
• If you bought Litecoin (LTC) at $105 and set a sell order at $107 with a trailing delta of 5, it means that your sell order will be adjusted dynamically as the price of LTC moves in your favor.
• Here's what it means technically:
• Your initial sell order is set at $107.
• As the price of LTC increases, the sell order will adjust upwards by $5 for every $5 increase in the LTC price.
• For example, if the LTC price rises to $110, your sell order will automatically adjust to $112 but with a delta of 5%. In case your coin could not move forward further then the delta will be adjusted accordingly. It means 5$ will be reduced or whatever is the exsct percentage.
• This allows you to capture profits as the price increases, while still having the flexibility to benefit from further price appreciation.
• However, if the price of LTC starts to decline and could not make to the mark of 5 delta , the sell order will be executed at 107 not below, ensuring that your set price is met.
•
• In summary, setting a trailing delta of 5 means your sell order will follow the price of LTC with a $5 buffer, allowing you to potentially capture more gains while managing risk.
• You can choose any delta of your choice but if you choose higher one you get more space for potentially going up and if you choose a lower delta you still manage to get benefits.
FOLLOW FOR MORE TIPS
