How to waste money in 10 minutes.
Instead of hypothesizing and making up cases, let’s take a look at a real market trade that occurred on September 10, 2019. Pay attention to the below BTC_USD Candlestick chart, where each stick equals 1minute periods.
Mike entered the trade at the price of 9,978, set Take profit at 10,070 and Stop loss beyond local low — 9,958. Sounds great. He wanted to go long, meaning to buy at a lower price and to sell when the price goes up. The price did go up and proceeded with rising, but the trade was closed with a loss by a Stop loss order. So what happened?
The price was rising slowly but didn’t reach the required point, and then it abruptly dropped for 9 minutes. After that, it started to grow rapidly, crossing Take profit point of 10,000 USD.
That is why Mike decided to exit the trade with a loss after Stop loss was triggered in said 10 minutes.
How to avoid losing money in such situations?
With 3Commas, you can use additional tools like Stop Loss Timeout. When the Stop Loss Timeout is turned on, the system will do an extra check before closing a trade by Stop Loss. If the price drops to or below the Stop Loss level, the system will wait for a specified amount of minutes. After this, it will do an additional check of the price: If the price still on or below the Stop Loss level, the trade will be sold by Stop Loss; If the price rose back above the Stop Loss level, the trade will remain open.
Cut a long story short if you set a Stop Loss Timeout of 10 minutes, the system will wait and check the price once again. If the price is still below the Stop loss point, the trade will be closed. Setting Stop Loss Timeout can save you from unexpected rate swings. Mike could lose 0.2 % but gained 0.92% instead.
Recommended Stop Loss Timeout is from 3 to 12 minutes; make sure to use this simple option to save your deposit.
Stop Loss Timeout is available in bots and Smart Trades.
Visit 3Commas and use all the professional trading tools.
See you, stay tuned.