Traders usually set Stop Loss to limit loss or gain in a trade. But sometimes there is no need to rush, think twice. 3Commas suggest you use Stop Loss Timeout - one of SmartTrade options on the service.
What is it for?
There are some cases when a whale comes and sells a large order at once, the price instantly goes down, but after that it goes up like a shot. So you’ve got a candle with a very long shadow down.
Usually, this is a one-time phenomenon and most of us do not want to lose money with the Stop Loss at such moments
But if you set SL Timeout for 1-2 min the system will do an extra check before closing a trade by Stop Loss. If the price goes up, then the transaction remains open.
Let's consider an example
You buy 1 ETH for $100 and set Stop Loss of -10%, at $90;
Stop Loss Timeout is enabled.
An amount is 2 min;
If the price drops to or below Stop Loss level, the system will wait for 2 minutes. After this, it will do an additional check of the price:
If the price still on or below Stop Loss level, the trade will be sold by Stop Loss;
If the price rose back above Stop Loss level, the trade will remain open.
Set SL Timeout
On the Smart Trade page, click on Set Stop Loss block, then, when all settings are completed:
Check the Stop Loss Timeout box
Set amount of minutes