If you read about Trailing Stop Loss, it will not be hard to understand that Trailing Take Profit is a stop that adjusts upwards in the case of a long trade, and follows the price. Its main and only purpose, as well as almost everything on 3Commas, is to maximize your profit. It is a safe way to secure profits without having to constantly monitor the chart and adjust your TP levels when a token you are trading is rising to the moon.
In other words, it’s like Take Profit with Trailing Stop Loss, but better. Well, or as a Trailing Stop on Forex.
How it works
You bought 1 ETH for $ 100 (lucky you) and set up Take Profit + 5% with the expectation that the deal will close when the forecasted $105 price is reached. With Trailing TP, if the price continues to rise, you will not be stopped at $105 and your trade will only close when the price starts falling. Here is what it looks like:
As a result, the transaction closed at $ 108.8 and brought 8.8% profit. This could only be achieved by leveraging the Trailing Take Profit.
Let’s look at a chart and follow this logic with real-life data: events:
This the MCO token price movement:
You bought the token at 0.00066000 and put the TTP + 5% at 0.00069300. TTP remembered the level of 69300 as the maximum price. Below, it created the Follow Line - the percentage of deviation. In this case, 1%, was selected in the original setting. When price reached the Follow Line, these are the possible scenarios:
- The price will go above the past maximum. Then the system will move the Follow Line to a new level. The formula of the new level will remain the same: “new maximum price minus 1%”. It will remember the level of the new peak.
- The price will go below the past maximum but will remain above the Follow Line. The system will wait and do nothing.
- The price has fallen to the level of the follow line or below. The system will close the deal. But do not be upset, because
Price trailing percent: the most important thing in Trailing Stop
You will inevitably have to deal with this question when setting up your trade. This is the percentage deviation or Trail Distance from the peak price. In the following example, the token breaks theTake Profit level rises higher and reaches the last maximum before rolling back. So let’s calculate what happens when you select Take Profit + 10% with a price deviation or Trail Distance of 2%:
- The price reached +10%, then fell to +9.5% and then rose again, and the transaction remained open.
- The price reached +10%, then fell to +8% and then rose again, and the transaction remained open.
- The price reached +10%, then fell to +7.9% and then rose again, and the transaction closed at +7.9%.
The difference between your Take Profit of +10% and the price at +7.9% is greater than the Trail Distance of 2% you indicated.
- The price reached +10%, and then fell to +7.9% and continued to fall; the transaction was closed at +7.9% for the same reason as in the previous example.
Consider the continuation of these events when the transaction is not closed. As you of course remember, the difference in price could not exceed our chosen 2% deviation. Let’s look at another possible scenario: The price reached +13%, then fell to +11.5% and then rose again, and the transaction remained open.
- The price reached +15%, then fell to +14% and then rose again, and the transaction remained open.
- The price reached +15.5%, then fell to +14% and continued to fall to +10%, and the transaction closed at +13.4%. Why? The difference between +15.5% and +14% is 1.5% and is still within the 2% deviation or Trail Distance you indicated. When the price hit the 13.4% level, the deviation from the maximum price of +15.5% became 2.1% and exceeded the maximum deviation you specified, and thus the transaction was closed.
How to setup
- Go here
- Choose “Set Take Profit”
- Set the target
- Choose a way to track prices, the options are well written here
- Choose deviation
- Do not forget to checkbox "Trailing", it is quite important
- Create a trade
Why trailing can only be enabled with a Market order
A Limit order does get into the order book on the exchange so it will close at the peak of the price if sufficient volumes are present. The Market order will definitely be sold completely, whereas a Limit order may be partially executed or not be executed at all.
How it works
The limit order is placed in the order book of the exchange before the selected token reaches the forecasted or desired value. The price of such an order is predetermined.
For a better understanding of the situations in which the limit works, it is important to know about the so-called squeezes - the shadows of candles. This is how situations are called when the price makes a quick jump up, and then immediately drops, often to the initial value, within a short time frame (within the same candle). The limit can be executed partially or not at all if there is not enough volume within that particular time frame. A limit order is placed in an order book, but if no one wants to buy it - the price will fall, and it will remain there.
A Market order does not get into the order book. Because if we place an order there, it will be bought faster than the trailing will work. The market order provides a sale not at a certain price, but at the best price at a particular moment.
The market order will be sold completely.
The risk of using Limit order is your responsibility. Trailing is intended for more measured price growth. Market orders "will reach" the condition of the sale as high as possible and will be fulfilled by selling the position completely.
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