Introduction to Take Profit and Stop Loss – Help Center

What is stop-profit and stop-loss?

Stop-profit and stop-loss means setting a price in advance in a transaction. When the market fluctuates (latest price/mark price/index price) to the trigger price you preset, the system will place an order according to the pre-set order type, price and quantity. Through stop-profit and stop-loss, users can better manage risks in market fluctuations and ensure transaction security.

Introduction to related terms and parameters

When using the stop-profit and stop-loss function, it is very important to understand the following key terms and parameters:

Trigger price: When the market price reaches the trigger price, the system will activate the preset order.
Order price: After the trigger price is triggered, the system executes the buy or sell operation at the order price.
Latest price: The recent transaction prices in the market reflect the current market situation.
Mark price: A price used to avoid market manipulation, calculated by the platform based on a series of parameters.
Index price: Based on the weighted prices of multiple exchanges, it reflects the overall price level of the market and provides a broader market price reference.

The differences and usage scenarios of entrusting stop profit and stop loss, position stop profit and stop loss, and planned stop profit and stop loss

	Meaning	Applicable scenarios
Entrust stop profit and stop loss	The stop-profit and stop-loss are set when placing an order, combining the limit order and market order mechanism	Suitable for users who want to set stop-profit and stop-loss at the same time when placing an order, so as to manage each transaction more flexibly
Position stop profit and stop loss	Set a stop-profit or stop-loss order for an existing position. When the stop-profit or stop-loss order is triggered, close the entire position (or a custom position ratio)	Applicable to users who already have positions and want to manage the risk of the entire position (or a custom position ratio)
Plan to take profit and stop loss	The stop-profit and stop-loss are set when opening a planned order. By setting specific conditions and trigger prices, determine when to take profit or stop loss	Suitable for users who want to preset complex conditions, and can flexibly adjust the stop-profit and stop-loss strategies according to market conditions

Why set a stop profit and stop loss?

In contract trading, market price fluctuations are often very drastic, especially when leverage is used, both the benefits and risks will be magnified. By setting a stop profit and stop loss, you can automatically execute transactions when the price reaches the preset trigger point, thereby effectively locking in profits or controlling losses.

Suppose you bought 10,000 BTC contracts (worth 10BTC) at a price of 50,000 USDT, using 10x leverage. In this case, if the BTC market price rises to 55,000 USDT, you can set an automatic liquidation through the stop profit setting to ensure a profit of 50,000 USDT. Similarly, if the price falls to 48,000 USDT, you can limit the loss to 20,000 USDT by setting the stop loss to automatically close the position when the latest transaction price reaches 48,000 USDT.

Profit and loss = (average closing price - average opening price) * direction * face value * number of contracts, where the long position direction is 1 and the short position direction is -1

Condition	Price (USDT)	Leverage	Result of stop-profit and stop-loss not set	Setting the result of stop-profit and stop-loss
Buy 10,000 BTC contracts	50,000	10x	-	-
The market rose to	55,000	10x	If the position is not closed in time, the profit will be reduced if the market falls back.	Close the position to take profit and lock in 50,000 USDT profit
The market fell to	48,000	10x	If the position is not closed in time, if the market continues to fall, the loss will continue to expand.	Stop loss to limit losses to 20,000 USDT

From the examples in the above table, it can be seen that the stop profit and stop loss settings can not only help you protect your investment in a volatile market, but also help you lock in profits in time when the price reaches the expected target. This is particularly important to avoid emotional operations and unpredictable market changes.

Stop-profit and stop-loss are powerful risk management tools. By understanding the difference between trigger price and commission price, as well as the difference between the latest price, mark price and index price, users can better use the stop-profit and stop-loss functions to improve trading efficiency and market response capabilities. According to different trading needs, choosing the appropriate stop-profit and stop-loss type can effectively lock in profits and limit losses, ensuring trading safety and stability.