What is entry?
Entry is the entry point, that is, the price at which a certain buy/sell transaction begins. If you buy or sell an asset like cryptocurrency and close the order at the Entry – entry point. Then your order is considered to be breakeven.
What is Stop Loss?
Define
Stop Loss abbreviated as SL – Stop Loss allows you to minimize losses by automatically closing a position if the asset's price reaches the price specified in your Stop Loss order.
How to place a Stop loss order
For Buy orders: Stop loss price must be lower than Entry price
For Sell orders: Stop loss price must be higher than Entry price
You should not place a Stop Loss order too close to the Entry point to avoid strong market fluctuations and your Stop Loss will be swept away.
What is Take Profit?
Define
Take Profit abbreviated as TP – Take Profit allows you to lock in profits by automatically closing a position if the asset's price reaches the price level specified in your Take Profit order.
How to place a Take Profit order
For Buy orders: Take Profit price must be higher than Entry price
For Sell orders: Take Profit price must be lower than Entry price
Advantages of pre-setting Take Profit and Stop Loss orders
Save time: Once you have your order in place, you won't have to constantly check how your trade is doing
More comfortable when trading: You will also reduce your pressure by pre-setting your take profit and stop loss levels within acceptable levels. Usually from 0.5 – 1% of your account
Profit Optimization: A pretty good tip is that you can set your Stop Loss order smaller than the Take Profit order from the Entry price. So with many transactions. Your profit taking orders will compensate for the Stop Loss order
Disadvantages of pre-setting Take Profit and Stop Loss orders
Stop Loss Sweep: When the market is highly volatile, you will sometimes experience a sweep of your Stop Loss then return to your Entry or Take Profit point. This is quite a common case, especially when you set the Stop Loss order too close to the Entry point
Losing a good position when rolling Take Profit: Sometimes your position at the Entry point is a good position that is difficult to return to. Your trade overtakes Take Profit and goes even further.
Although the above cases are possible risks, it is extremely necessary to set an SL or TP when you trade. Especially in Futures trading because if you remove Stop Loss you can burn your account. Eat less and eat longer.
Epilogue
When you start trading more professionally. Take Profit and Stop loss are two important orders that you must set for your trades to help you save time and create more efficiency when trading.