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How to Set Stop-Loss and Take-Profit Orders
Learn what stop-loss and take-profit orders do, how to choose levels and the mistakes beginners make.
What they do
A stop-loss closes your position if the price moves against you to a level you choose, limiting the loss. A take-profit closes it when the price reaches your target, locking in the gain.
How to choose levels
Decide the most you are willing to lose before you open a trade, then place the stop where the trade idea is proven wrong, such as below a recent low for a long position. Set the target so the possible gain is larger than the possible loss.
Common mistakes
Placing the stop too close, so normal price swings trigger it. Moving the stop further away to avoid a loss. Using high leverage, where a small move can liquidate you before the stop is reached.
Limits to know
In fast markets the price can jump past your stop, so you may be closed at a worse price (slippage). A stop-loss limits risk but cannot remove it. Practise with the demo account first.
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Educational content only, not financial advice. Crypto assets carry a high risk of loss.
Keep learning
Look up unfamiliar words in the crypto glossary or browse coin markets.