In the crypto money exchange, the stop order can be explained as the price that triggers the stop price order you set. As an example; You think that if a cryptocurrency breaks the resistance price, which can be defined as critically, upward, the price will rise, but you have thoughts that the rise will not occur unless this price is broken up. In this case, the critical resistance level you set is the stop order price. In all probability, if you set a slightly higher price of this price, this will be your limit price.
How to Make and Use Stop Orders in Crypto Money Exchange?
What the stop orders and stop-limit orders mean in the crypto money exchange are among the issues that need to be understood very well.
The main purpose of all stop orders is to close the transaction at the price you set when you see that the transactions do not take place in the stock market as you expect. These orders are automatically activated when the price of the market reaches the stop level you set and is a kind of way to stop the transaction.
Sampling to better explain this situation will make it easier to better understand the stop order. For example; You bought 1 bitcoin at X price. After you bought the Bitcoin, it went to the price Y, which is above the X price you bought, and when you make a general analysis, you think that this price will increase even more. In this case, you can place a stop-loss order and avoid having to constantly look at the screen to follow the price level.
If you place a stop-loss order at a price between X and Y prices, you can take your profit if the price goes down. This is kind of a guarantee. Placing a stop order between X and Y prices means that if there is a drop below this price range, I sell 1 bitcoin.
It also eliminates the necessity of following the stop order, which provides trading comfort and minimizes losses. At this point, it should be especially noted that some crypto money exchanges do not have stop-loss applications. Before trading on crypto money exchanges, it will be useful to find out whether stop orders are executed or not. This method, which is a kind of assurance, is available in money exchanges such as Binance.