Binance, Exchanges

Can You Set Stop Loss on Binance?

Most investors have heard of stop-loss orders, but many don’t use them because they don’t understand how they work. A stop-loss order is an order placed with a broker to buy or sell a security when it reaches a certain price.

The investor sets the stop price, which is the price at which the order will be triggered.

A stop-loss order is designed to limit an investor’s loss on a security position. For example, suppose an investor buys stock in Company XYZ at $50 per share and places a stop-loss order at $45 per share.

NOTE: WARNING: Stop loss orders on Binance can be subject to slippage, which means the actual execution price may be different from the order price. This could result in significant financial losses for users. Additionally, stop loss orders can be subject to market volatility and may not execute at the desired price. Therefore, users should use caution when using stop losses and should take into consideration of the risks associated with them before doing so.

If the price of XYZ falls to $45, the stop-loss order will be triggered and the stock will be sold at $45. The stop-loss order protects the investor from a larger loss if the price of XYZ falls further.

Stop-loss orders are not foolproof, however. In fast-moving markets, it’s possible for the price of a security to fall so quickly that the stop price is never reached and the order is not triggered.

This is known as a “gap down.” Another risk is that the stop price may be reached and the order triggered, but then the price may rebound quickly, resulting in a smaller loss than would have been incurred if no stop-loss order had been placed.

Despite these risks, stop-loss orders can be useful tools for investors who want to limit their losses on a security position.

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