What Are Take-Profit and Stop-Loss Orders?

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In the fast-paced world of cryptocurrency trading, managing risk and locking in profits are essential for long-term success. One of the most effective tools traders use to achieve this is the take-profit (TP) and stop-loss (SL) order. These automated orders allow you to set predefined exit points for your positions, helping you maintain discipline and avoid emotional decision-making during volatile market movements.

But what exactly are take-profit and stop-loss orders, how do they work, and how can you use them effectively in your trading strategy? Let’s dive in.

Understanding Take-Profit and Stop-Loss Orders

A take-profit and stop-loss order allows traders to predefine the price at which they want to close or reduce their contract position—either to secure profits or limit losses. You can set these orders based on specific price levels or percentage gains/losses. Once the market price (or mark price) reaches your specified trigger level, the system automatically executes a market order to close the designated portion of your position.

This automation is especially valuable in 24/7 crypto markets, where prices can shift dramatically even while you're offline.

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Key Terms Explained

Take-Profit Price / Stop-Loss Price

When the index price or mark price hits your defined take-profit or stop-loss level, the system triggers the corresponding order and submits a market sell/buy order to reduce or fully close your position.

These prices act as your personal exit rules:

Order Quantity

This refers to the amount of your position that will be closed once the trigger price is reached. You can choose to close a partial or full position depending on your strategy.

⚠️ Important: Triggered TP/SL orders only reduce or close existing positions—they do not open new opposite positions.

Take-Profit and Stop-Loss Modes

For USDT-margined perpetual contracts, two distinct TP/SL modes are available: Partial Position and Entire Position. By default, the system uses Partial Position mode, but you can switch between modes via the "Trading Settings" menu in the upper-right corner of the trading interface.

1. Partial Position Mode

For example, you might set:

This gives you granular control over profit-taking and risk management.

2. Entire Position Mode

Use this mode if you prefer straightforward exits without managing multiple triggers.

How Take-Profit and Stop-Loss Orders Work

Once triggered, the system automatically places a market order to close the specified quantity. However, it's important to understand that BIT uses IOC (Immediate-or-Cancel) market orders, meaning:

This introduces a small execution risk during periods of low liquidity or extreme volatility. In fast-moving markets, your order may not fill entirely at the expected price—leading to slippage or partial fills.

To mitigate this, consider using more conservative TP/SL levels during high-volatility events.

The “Retry” Feature for Better Execution

To improve fill reliability, BIT offers a “Retry” function for TP/SL orders.

When enabled:

This increases the chance of full execution without requiring manual intervention—especially useful during sudden price swings.

👉 Learn how advanced trading tools can boost your execution accuracy.

How to Set Up a Take-Profit and Stop-Loss Order

Follow these steps to configure TP/SL orders on your USDT perpetual contracts:

  1. Navigate to the USDT Futures Trading page
  2. Choose Long or Short position
  3. Click on Take-Profit / Stop-Loss

  4. Enter:

    • Position size
    • Entry price (if opening new)
    • Take-profit price
    • Stop-loss price
  5. Confirm details and click Buy Open Long (or equivalent)

After successful placement, view your active position and TP/SL settings under Current Holdings.

✅ Note: TP/SL orders only become active once:

  • The original order is fully filled, or
  • It’s partially filled, and the rest is canceled

You can also add or edit TP/SL rules directly from the position management panel:

You can manage multiple orders in real time—adjusting levels as market conditions evolve.

Frequently Asked Questions (FAQ)

Q1: Can a take-profit or stop-loss order open a new position?

No. These orders only close or reduce existing positions. They will never open a reverse trade automatically.

Q2: What happens when one leg of an OCO order triggers?

TP and SL orders operate as an OCO (One-Cancels-the-Other) pair. When either take-profit or stop-loss is triggered, the other is automatically canceled.

Additionally, if your entire position is closed (e.g., by liquidation or manual exit), all associated TP/SL orders are canceled.

Q3: Why didn’t my stop-loss execute completely?

Due to the use of IOC-type market orders, incomplete fills can occur in low-liquidity environments. Enabling the retry feature improves execution chances.

Q4: Can I modify my TP/SL after setting it?

Yes—you can edit or remove TP/SL orders anytime before they’re triggered, provided you're using Partial Position mode. In Entire Position mode, new settings replace old ones.

Q5: Are notifications sent when TP/SL orders trigger?

Yes. The system sends an email notification when a take-profit or stop-loss is activated. However, don’t rely solely on emails—monitor your positions regularly.

Q6: Should I always use take-profit and stop-loss orders?

While not mandatory, using TP/SL orders is considered a best practice in risk management. They help enforce discipline and protect capital—especially crucial in volatile crypto markets.

Core Keywords

Take-profit and stop-loss orders are more than just convenience tools—they’re fundamental components of a disciplined trading plan. Whether you're a beginner or experienced trader, integrating these features into your workflow can significantly improve your consistency and peace of mind.

👉 Start applying intelligent exit strategies with powerful trading tools now.