Tutorial on stop-profit and stop-loss of Kraken perpetual contract

Kraken's perpetual contracts feature stop-profit and stop-loss orders, allowing traders to safeguard profits and minimize risks by setting predetermined prices for asset sales and purchases.

Nov 14, 2024 at 09:56 am

Tutorial on Stop-Profit and Stop-Loss of Kraken Perpetual Contract

Kraken is a leading cryptocurrency exchange that offers a variety of trading products, including perpetual contracts. Perpetual contracts are a type of derivative that allow traders to speculate on the future price of a cryptocurrency without having to take delivery of the underlying asset.

Stop-profit and stop-loss orders are two types of orders that can be used to manage risk when trading perpetual contracts. A stop-profit order is an order to sell a cryptocurrency when it reaches a certain price, while a stop-loss order is an order to buy a cryptocurrency when it reaches a certain price.

How to Set a Stop-Profit Order

1. Log in to your Kraken account and click on the "Trading" tab.
2. Select the perpetual contract that you want to trade and click on the "Trade" button.
3. Enter the amount of the cryptocurrency that you want to sell and the price at which you want to sell it.
4. Click on the "Stop Profit" button.

Your stop-profit order will be placed and will remain active until it is executed or canceled. If the price of the cryptocurrency reaches the price that you specified, your order will be executed and you will sell the cryptocurrency at that price.

How to Set a Stop-Loss Order

1. Log in to your Kraken account and click on the "Trading" tab.
2. Select the perpetual contract that you want to trade and click on the "Trade" button.
3. Enter the amount of the cryptocurrency that you want to buy and the price at which you want to buy it.
4. Click on the "Stop Loss" button.

Your stop-loss order will be placed and will remain active until it is executed or canceled. If the price of the cryptocurrency reaches the price that you specified, your order will be executed and you will buy the cryptocurrency at that price.

Tips for Using Stop-Profit and Stop-Loss Orders

• Use stop-profit orders to protect your profits. When you have a profitable trade, you can set a stop-profit order to sell the cryptocurrency at a price that will lock in your profits.
• Use stop-loss orders to limit your losses. When you have a losing trade, you can set a stop-loss order to buy the cryptocurrency back at a price that will limit your losses.
• Be careful not to set your stop-profit or stop-loss orders too close to the current price of the cryptocurrency. If the price of the cryptocurrency moves quickly, your order may be executed before you have a chance to cancel it.
• Monitor your stop-profit and stop-loss orders regularly. As the price of the cryptocurrency changes, you may need to adjust your orders to ensure that they are still protecting your profits or limiting your losses.

Conclusion

Stop-profit and stop-loss orders are two powerful tools that can help you manage risk when trading perpetual contracts. By using these orders, you can protect your profits, limit your losses, and trade with confidence.