Trailing Buy and Trailing Sell — What The Heck Are They?
So traders are a different breed. We want to buy something as cheap as we can and we also want to sell something for as much money as we can. However, finding those two values is always a difficult target to get.
We have all been there, thinking that #bitcoin was going to bottom out at 40,000 and going in on it. Then an hour later it drops back down to 35k or 34k and we let ourselves want to get into it more, however we went all in at 40k.
Many times we have market buys and sells and we also have limit buys and sells. If you do not know what those do or how to use them, please read up on my other articles and hopefully they can help you out. However, there are two orders that many times get overlooked but if set up correctly have potential to increases your chances of getting the “best bang for your buck”.
First what I would like to explain with a trailing buy or sell is there is a trigger price, and a rebound price (or percentage). When setting up a trailing buy or sell you will need to figure out what you would like to have your trigger price at. So you input your trigger price and then you will explain what the maximum bounce will be in the order.
So for this example, let’s try with bitcoin if we wanted a trailing buy to be set up with a trigger at 40k, with a 10% rebound that means that at 40k he the price will be triggered. The order will not be triggered yet, it will need to move 10% more before it is officially bought. So if BTC gets back up to 44k then it will buy.
What if it keeps going down though? That is where the fun begins! If the price keeps going down and continues down to say 30k, that is the new lowest price and if it jumps 10% from 30k, then a buy will happen. So your new price would be 33,000, instead of 40k.
The same exact thing will happen with a trailing sell, only opposite. Say you ended up buying BTC for 34k and want to trade it for a profit. You set a trigger price of 40k and a 10% bounce. So once the price of BTC hits 40k, the least you would sell it for would be 36k. HOWEVER, if it keeps going and blasts off on an all out bull run, you could come out with a whole lot more profit rather than just setting a limit sell.
Pionex- Built In Trading Bots
Pionex is the exchange that I typically use in order to use these features. However they can be found on many different exchanges and can be applied to anything that you are buying and selling. If the write up is not clear for you, please feel free to check out my video that I made for the trailing buy and sell feature and how exactly it works!