What are Take-Profit/Stop-Loss Orders? Your Automated Tool for Risk Management and Profit Locking
1. What Is a Take-Profit/Stop-Loss Order?
A Take-Profit/Stop-Loss order lets users set a trigger price in advance, along with the price and quantity to buy or sell once the trigger is reached. When the market’s latest price hits the trigger price, the system automatically submits the preset order.
On MEXC Spot, this feature includes two types of conditional orders: Limit Take-Profit/Stop-Loss and Market Take-Profit/Stop-Loss. These orders help traders lock in gains when the market moves in their favor or limit losses when it moves against them.
2. Key Parameters of a Take-Profit/Stop-Loss Order
1）Trigger Price: The price level that must be reached for your preset order to activate.
2）Buy Price / Sell Price: The price at which you want to buy or sell the asset (for limit orders).
3）Buy Amount / Sell Amount: The quantity you want to buy or sell.
4）Order Amount: The total amount of the cryptocurrency you want to buy or sell.
Important notes:
- For Market Take-Profit/Stop-Loss Orders, users do not need to enter a buy/sell price. The order will execute at the best available market price once triggered.
- Market orders are placed based on the users' specified amount or total. Final execution price and quantity depend on actual market conditions.
3. Market vs Limit vs Take-Profit/Stop-Loss
| Market Order | Limit Order | Take-Profit/Stop-Loss | |
| Primary Goal | Fast execution | Control over price | Secure gains or control risk |
| Price Control | None. Executes at market price. | Yes. Executes at your set price or better. | Limit TP/SL: Price control Market TP/SL: No price control |
| Execution Certainty | Guaranteed to fill | Not guaranteed to fill | Market TP/SL: Fills but price may vary Limit TP/SL: Price fixed but may not fill |
| How to Set | Enter only amount or total | Enter price + amount or total | Enter trigger price + amount or total (limit price optional) |
4. Four Key Advantages of Take-Profit/Stop-Loss Orders
Secure Profits in Advance: Take-Profit orders help you close a position automatically when the price reaches your target. This avoids missing the ideal exit due to hesitation and avoids letting earlier gains slip away.
Control Risk and Protect Capital: Crypto markets are volatile and unpredictable. Stop-Loss orders help limit downside by closing your position when the market moves against you, preventing further losses.
Automate Trades and Reduce Emotional Bias: Fear and greed often impact trading decisions. Conditional orders execute strictly according to preset rules, helping you stay disciplined and objective.
Reduce Monitoring Pressure: You do not need to watch the market continuously. Once your order is set, the system executes it automatically when conditions are met.
Take-Profit/Stop-Loss Orders are essential tools for managing risk in crypto trading. By setting clear trigger prices and order parameters, you can better protect your funds while capturing opportunities in a fast-moving market. Whether you are experienced or new to trading, using TP/SL helps build a more disciplined and structured approach.
Recommended Readings:
- How to Use MEXC Take-Profit/Stop-Loss Orders
- What Is a Market Order
- What Is a Limit Order
- What Is an OCO Order
Disclaimer: The information provided in this material does not constitute advice on investment, taxation, legal, financial, accounting, or any other related services, nor does it serve as a recommendation to purchase, sell, or hold any assets. MEXC Learn offers this information for reference purposes only and does not provide investment advice. Please ensure you fully understand the risks involved and exercise caution when investing. MEXC is not responsible for users' investment decisions.
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