Mastering Take-profit and Stop-loss Orders in Crypto Futures Trading
Learn how to set take-profit and stop-loss orders on ZMO's futures interface — key risk management tools that lock in gains and cap losses before the market moves against you.
LL
Lulu Liu
8 min
What are take-profit and stop-loss orders?
Take-profit and stop-loss orders are conditional trades used by futures traders to set specific trigger conditions, order amounts, and quantities upon taking a position. When the market price matches the trigger conditions set by the trader, the trade will be initiated and placed in the market. Such orders are typically placed for risk management reasons.
Take-profit and stop-loss orders are essential for futures traders, allowing timely realization of profits when trades are favorably aligned, and preventing excessive losses or forced contract liquidation when trades are unfavorably aligned. Developing a clear understanding of take-profit and stop-loss strategies and effectively managing risks are crucial for market survival.
You can set up take-profit and stop-loss orders on ZMO’s futures trading interface, customizing them based on your trading preferences.
How to Set Up Take-profit and Stop-loss Orders on ZMO’s Trading Interface
1. Navigate to the futures trading page.
2. To illustrate, let's consider setting a stop-loss order for an existing long position. On the trading panel, click on the "Advanced" option on the trading panel and find "Stop-Limit". The "Trigger Price" is the market price that matches your established trigger price and initiates the order. The "Price" field represents the price at which you wish to place the order once the trigger price is hit. The "Size" represents the number of contracts you wish to implement a stop-loss order with.
3. Please note that if you only wish to reduce your position, ensure the "Reduce Only" box is ticked. If left unticked, the system will place the order with the price and quantity you have set. Furthermore, the platform offers criteria for trigger price assessment, allowing traders to choose between using the mark price or the last price as the trigger condition.
4. The same steps are applicable when setting up take-profit orders. Additionally, the system offers market price take-profit and stop-loss orders, helping traders place a market order when the trigger price is reached.
