Register on Binance.com with a 10% discount on fee using Referral code J2X4E7UN, (in the Futures section use the code CRYPTO4U instead)
This is a Complete Guide for taking trailing stop orders on Binance.com
What is Binance Trailing Stop loss / Take profit
.A trailing stop order allows traders to place a pre-set order at a specific percentage away from the market price when the market swings. It helps traders to limit the loss and to protect gains when a trade does not move in the direction that traders consider unfavorable.
The trailing stop moves by a specified percentage (Callback rate) when the price moves favorably. It locks in profit by enabling a trade to remain open and continue to profit as long as the price is moving in the direction favorable to traders. The trailing stop does not move back in the other direction. When the price moves in the opposite direction by a specified percentage (Callback rate), the trailing stop will close/exit the trade at market price.
The trailing stop moves by a specified percentage (Callback rate) when the price moves favorably. It locks in profit by enabling a trade to remain open and continue to profit as long as the price is moving in the direction favorable to traders. The trailing stop does not move back in the other direction. When the price moves in the opposite direction by a specified percentage (Callback rate), the trailing stop will close/exit the trade at market price.
how to use BINANCE TRAILING STOP LOSS
Actually the trailing stop order is enabled only in the Futures section of Binance.
Moreover, you have to use the new version of the Website. In fact, Trailing stop order is supported on the latest version of the trading interface only.
If you are in the Old version, you need to click on the button “New Website” as in the figure below
Moreover, you have to use the new version of the Website. In fact, Trailing stop order is supported on the latest version of the trading interface only.
If you are in the Old version, you need to click on the button “New Website” as in the figure below
How to enable Trailing Stop Order
When you are in the New Website, you need to go move the cursor on the triangle near “Stop Limit” and choose “Trailing Stop”
Now you can see as in the below screenshot.
How does a Trailing Stop Order work on Binance?
Traders can place a trailing stop order when entering into a position initially, though not common. The trailing stop could be placed as a reduce-only order with the aim to decrease or to close an open position, too.
For a LONG trade, a sell trailing stop order would be placed above the trade entry. The trailing stop price moves up by a trailing percentage (Callback rate).
A new trailing stop price will be formed when the price moves up.
When the price moves down, the trailing stop stops moving.
A sell order will be issued if the price moves more than the predetermined callback rate from its peak price and reaches the trailing stop price. The trade will be closed with the sell order at market price.
A ”buy” trailing stop order is the mirror image of a “sell” trailing stop order”.
For a SHORT trade, a buy trailing stop order would be placed below the trade entry. The trailing stop price moves down by a trailing percentage (Callback rate).
A new trailing stop price will be formed when the price moves down.
When the price moves up, the trailing stop stops moving.
A buy order will be issued if the price moves more than a predetermined callback rate from its lowest price and reaches the trailing stop price. The trade will be closed with the buy order at market price.
For a LONG trade, a sell trailing stop order would be placed above the trade entry. The trailing stop price moves up by a trailing percentage (Callback rate).
A new trailing stop price will be formed when the price moves up.
When the price moves down, the trailing stop stops moving.
A sell order will be issued if the price moves more than the predetermined callback rate from its peak price and reaches the trailing stop price. The trade will be closed with the sell order at market price.
A ”buy” trailing stop order is the mirror image of a “sell” trailing stop order”.
For a SHORT trade, a buy trailing stop order would be placed below the trade entry. The trailing stop price moves down by a trailing percentage (Callback rate).
A new trailing stop price will be formed when the price moves down.
When the price moves up, the trailing stop stops moving.
A buy order will be issued if the price moves more than a predetermined callback rate from its lowest price and reaches the trailing stop price. The trade will be closed with the buy order at market price.
1. Callback Rate
Callback rate determines the amount a trailing stop price will trail the price. The callback rate range is available from 0.1% to 5% by placing the rate manually in the “Callback Rate” field. Alternatively, quick options such as “1%” and “2%” are available for quick selection.
2. Activation Price
Traders can fill in the price level that triggers the trailing stop. If no activation price is being filled, the activation price will be the market price by default (either “Last Price” or “Mark Price” subject to the choice of trigger types).
In order to place a buy trailing stop order (SHORT POSITION), the activation price must be less than the current market price.
The market’s lowest price must reach the activation price in order to meet the condition. If the price doesn’t go below the Activation Price, the Trailing stop order will not start working.
Conversely (LONG POSITION), the activation price must be larger than the current market price to place a sell trailing order.
The market’s highest price must exceed the activation price in order to meet the condition. If the price doesn’t go above the Activation Price, the Trailing stop order will not start working.
Activation price is used in order to start a Trailing stop loss / take profit only after a condition of price. So, if you place an activation price, probably you will need to place also a Stop loss order in order to protect your trade in the case that the trailing stop loss doesn’t meet your Activation price condition!
3. Reduce only-trigger (set in “Advanced” button)
It is typically obvious that the trailing stop loss is used for reducing or closing your position and not for opening a position. So you need to activate the flag “reduce only-trigger” in the Advanced section.
I think it could be useful as a default flag, but actually it isn’t!
Callback rate determines the amount a trailing stop price will trail the price. The callback rate range is available from 0.1% to 5% by placing the rate manually in the “Callback Rate” field. Alternatively, quick options such as “1%” and “2%” are available for quick selection.
2. Activation Price
Traders can fill in the price level that triggers the trailing stop. If no activation price is being filled, the activation price will be the market price by default (either “Last Price” or “Mark Price” subject to the choice of trigger types).
In order to place a buy trailing stop order (SHORT POSITION), the activation price must be less than the current market price.
The market’s lowest price must reach the activation price in order to meet the condition. If the price doesn’t go below the Activation Price, the Trailing stop order will not start working.
Conversely (LONG POSITION), the activation price must be larger than the current market price to place a sell trailing order.
The market’s highest price must exceed the activation price in order to meet the condition. If the price doesn’t go above the Activation Price, the Trailing stop order will not start working.
Activation price is used in order to start a Trailing stop loss / take profit only after a condition of price. So, if you place an activation price, probably you will need to place also a Stop loss order in order to protect your trade in the case that the trailing stop loss doesn’t meet your Activation price condition!
3. Reduce only-trigger (set in “Advanced” button)
It is typically obvious that the trailing stop loss is used for reducing or closing your position and not for opening a position. So you need to activate the flag “reduce only-trigger” in the Advanced section.
I think it could be useful as a default flag, but actually it isn’t!
4. Type of Trigger (set in “Advanced” button)
Traders could choose either “Last Price” (default) or “Mark Price” as a trigger. If traders select “Mark Price” as a trigger, when the Mark Price reaches or exceeds the activation price, the trailing stop will be activated even though the Last Price does not reach the activation price.
Please be noted that Binance uses Mark Price as a trigger for liquidation and to measure unrealized profit and loss. The Mark Price is generally a few cents from the Last Price. However, the Last Price might deviate dramatically and significantly from the Mark Price during extreme price movements. Hence, please monitor the price difference between Last Price and Mark Price. You could always cancel the order you have placed and replace the order if you would like to change the Trigger from Mark Price to Last Price or vice versa.
Traders could choose either “Last Price” (default) or “Mark Price” as a trigger. If traders select “Mark Price” as a trigger, when the Mark Price reaches or exceeds the activation price, the trailing stop will be activated even though the Last Price does not reach the activation price.
Please be noted that Binance uses Mark Price as a trigger for liquidation and to measure unrealized profit and loss. The Mark Price is generally a few cents from the Last Price. However, the Last Price might deviate dramatically and significantly from the Mark Price during extreme price movements. Hence, please monitor the price difference between Last Price and Mark Price. You could always cancel the order you have placed and replace the order if you would like to change the Trigger from Mark Price to Last Price or vice versa.
Conditions for the activation
Please note that there are 2 conditions for the activation of the trailing stop order, namely activation price and callback rate will need to be fulfilled in order to activate the trailing stop order to be issued as a market order to close/exit the trade.
A sell trailing stop order (LONG TRADE) will be placed if the conditions are met as follows:
A sell trailing stop order (LONG TRADE) will be placed if the conditions are met as follows:
- Activation Price <= Highest Price and
- Rebound Rate >= Callback Rate
- Activation Price >= Lowest Price and
- Rebound Rate >= Callback Rate
What is the difference between Trailing Stop Order and Stop Loss Order?
- Stop loss order helps to reduce losses while trailing stop order locks in profit and limit loss at the same time.
- Stop-loss order is fixed and has to be manually reset while the trailing stop is more flexible and automatically tracks the price direction.
You can see more examples and clarifications on https://binance.zendesk.com/hc/en-us/categories/360001987372-Futures-Contract
Register on Binance.com with a 10% discount on fee using Referral code J2X4E7UN, (in the Futures section use the code CRYPTO4U instead)