1) What is a Trailing Stop Order?

A trailing stop order allows users to place a preset order when a larger trail variance occurs. It helps users secure the profit and limit the loss when the price moves in a direction unfavorable to users. In other words, it allows an order to remain open and continue to profit as long as the price moves in the direction that users consider favorable. 

The trailing stop moves by a specified percentage or a specified amount when the price moves favorably, but the trailing stop does not move back in the other direction. Instead, it will close the order at market price when the price moves in the opposite direction by the percentage or amount set by users.

Parameters Description

1. Trail Variance

Trail variance is the condition to determine whether a strategy will be triggered by using it to calculate the actual trigger price. The trail variance allows two input types: the ratio and the variance (Var.). The ratio is the percentage of the price movement whereas the variance is the price distance (USDT-M unit is "USDT"; COIN-M unit is "USD").

2. Activation Price

Activation price is the activation condition of a trailing stop order. The order will be activated when the price (subjected to "Price Type") reaches or exceeds the activation price. The system will only start calculating the actual trigger price upon activation. The order will be activated upon placement if the activation price is not defined.

3. Price Type

Users can select among "Last Price", "Fair Price" and "Index Price" as a trigger. For example, if "Fair Price" is set, the trailing stop will be activated when the Fair Price reaches or exceeds the activation price even when the Last Price does not reach the activation price.  

The Pros & Cons of Trailing Stop Order and How It Works:

Pros	Protects your profit when the market price moves in the opposite direction.
	The order is flexible and can be combined with limit order, take profit and stop loss order.
	It is suitable for traders who are busy and cannot keep track of the market movement. Trailing Stop Order can continuously track the market for you, and continuously update the trigger price according to the market situation to maximize your profits.
Cons	When a Trailing Stop Order is triggered, the system will buy in at the market price. Big swings in the market will cause the final order transaction price to deviate greatly from the trigger price.
How it works	When the market rises high and eases back, it helps traders to sell at the top of the bull market.
	When the market starts bottoming out, it helps traders to buy at the dips of the bear market.

 

Example of Trailing Stop Order and How It Works:

Scenario: When the market rises high and eases back.

Assume the current last price of BTCUSDT Futures is 30,000 USDT. A user places a sell trailing stop order for a long trade with the parameters below:

• Trail variance: 5%;

• Activation price: 31,000 USDT;

• Price type: Last Price.

When the price surpasses 31,000 USDT, the activation price, the trailing stop order is activated. The calculated trailing stop price is 29,450 USDT [Formula: Last Price x (1 - Trail Variance Ratio)]. When the price increases to 32,500 USDT, a new trailing stop price is formed at 30,875 USDT. The trailing stop price stops when the price declines. 

When the price surges to 35,000 USDT, a new trailing stop price is formed at 33,250 USDT. When the price falls, the trailing stop price remains the same price level. A sell order will be triggered at market price to close the position when the price retraces more than 5%, reaching and exceeding the trailing stop price at 33,250 USDT.

Two conditions were met to trigger the trailing stop order:

1. The last price reaches the activation price (31,000 USDT) to activate the order;

2. Rebound Variance (5%) ≥ Trail Variance (5%).

Remark:

Rebound Variance 

= (Highest Price - Rebound Price) / Highest Price

= (35,000 - 33,250) / 35,000

= 5%

 

2) Stop Loss Take Profit Settings Based on ROE and PnL Amount

3. K-line Display of Average Position Price, Current Orders and Historical Transactions

Click [Pro Version] to view more futures trading details.

Click the icon to display 1. Open Order 2. Position 3. Order History

Set BTC USDT-M Perpetual as an example, when the open order is checked, (1) the average opening price is 29,794.00, (2) the position price is 30,000.00 as displayed on the K-line chart. The tiny arrows on the K-line chart indicate the order history.

4) Opening a Position in USDT on Both Web and Mobile

When you are opening a position, you can now select USDT as a quantity unit.

 

5) Sharing PnL Results of Open and Past Positions

To share the PnL results of currently held positions:

To share the PnL results of past positions:

After you have opened a position, you can choose to share your futures positions or PnL results under “Position History”.