How To Set Limit Order On Coinbase

One of the well-nigh popular American-based cryptocurrency exchanges is Coinbase Pro, formerly known equally GDAX. Information technology has all the necessities a trader needs to purchase and sell diverse cryptocurrencies. Buy and sell orders are easy to understand, simply one of the more than complex order types is called a finish order. In this guide, we'll show you how to place a end-loss social club on Coinbase Pro.

Does Coinbase Pro support Stop Orders?

Yes, Coinbase Pro does support stop-loss orders. A stop-loss is a conditional order that triggers at a given price. These social club types are for automatically selling your crypto if information technology drops below a given cost. The idea is that when the price drops beneath a certain level, it may keep going. In this scenario, you might desire to end your losses.

How to Place a Cease Loss Order on Coinbase Pro

To place a end-loss order, you'll need to accept an open position. Change the order type from Purchase to Sell and select the Stop tab. Y'all volition encounter three fields, and here's what they mean:

• Stop Toll: cost at which the order triggers
• Amount: amount you want to sell
• Limit Price: the toll at which y'all volition sell

The almost disruptive part about a stop-loss order is understanding the divergence between the finish price and the limit price. In one case yous grasp that concept, it volition all make sense.

Two prices are necessary because one is the trigger (stop), and the other is your desired price to sell (limit). When the toll is dropping, information technology can happen very quickly and violently—having an automated way to sell your position can outcome in fewer losses.

For cease-loss orders, you will want to set your limit price slightly beneath the stop toll. The reason is because of something known as slippage. In some scenarios, the price can drop below your stop price if there are no buyers in that range. That's where the limit toll comes into play.

Hypothetical Case

In a hypothetical scenario, I accept one Bitcoin, and the electric current cost is $51,000. I feel that if the price were to drop below $50,000, it would get much lower. So, if it drops below $50,000, I want to sell my Bitcoin, but I can't sit here and stare at the chart all day long.

Instead, I'll set up a stop-loss order. My stop price will be $49,990, pregnant if Bitcoin hits this price, my order volition trigger. Other people probably have the same idea, so I'll give myself some absorber and set my limit price to $49,950. In other words, if Bitcoin reaches $49,990, I will automatically place an order to sell my Bitcoin for $49,950.

"But yous're losing $50! Why not simply sell at $fifty,000?"

Well, I believe $fifty,000 is a spot where Bitcoin could get to but and then immediately go back up. I would be disappointed near selling my Bitcoin if that happened. I just want to sell if the price drops below that betoken, hence the $49,990 stop cost. My $49,950 limit price gives me a $40 absorber to increase the odds that my order goes through and doesn't get skipped over.

Source: https://techozu.com/how-to-place-a-stop-loss-order-on-coinbase-pro/

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