With every passing time, the bot will evaluate and execute orders based on the entry and exit conditions. Once the exit condition is met, the bot will “exit” the trading position by selling assets. There are two types of exit conditions.
The Take Profit instructs the bot to close a deal once the profit reaches a percentage of the allocated fund. And then, you have the Stop Loss — which instructs the bot to close a deal once the loss reaches a percentage of the allocated fund. There is another Stop Loss called the Trailing Stop Loss. This feature is available in the Advanced Bot. Trailing Stoploss is designed to lock in profits by moving the stoploss level upwards in tandem with an upward moving market.
If the asset price drops after undergoing an uptrend, the increased stoploss level will be hit. Hence, it ends up capturing profits for the trader. At CryptoHero, Premium and Professional users have access to Advanced bots — where you can find two types of Trailing Stoploss: Fixed TSL and Variable TSL. Fixed TSL increases the stoploss level at fixed preset interval. In this example, we will instruct the bot to set the stoploss level at 1% below the current price of the asset each time the price increases above the Buy Price at 2%.
Let’s say the bot opened the deal when the asset was priced at 100 USDT. With that in mind, the stoploss will be at 99 USDT — which is 1% lower than the current price. Notice how each time the asset price increases by 2%, the trailing stop loss would readjust accordingly?
Although the asset price did drop a little here, the bot isn’t prompted to close the trade since the price isn’t below the stoploss level. When it does hit the stoploss level, the bot will automatically exit the trading position. If you think that the Fixed TSL is too inflexible for the situation, then the Variable TSL might be the better fit. The stoploss level will readjust itself according to the difference between the current asset price and the buying price. For example, we instruct the bot to set the stoploss to 1% below the asset price when it reaches 2% above buying price. We will add another one. This time, the stoploss is set to 2% below the current price when the asset price hits 6% above buying price. And so on.
If the deal is opened at 100 USDT, this will be the buying price. Once the asset price is 6% higher than 100 USDT, the stoploss will readjust according to the configurations. In this case, it will be set 2% below current market price.