What is a conditional order (stop loss / take profit)?

Conditional orders are orders that become such when a certain condition is triggered; for example, you can exploit conditional orders if you want to limit losses by selling at an X price, if the market price falls below Y.

Stop loss and take profit on therocktrading are entered as, precisely, conditional orders, specifying the price (condition) to which I have to shoot.

In the purchase orders, a “stop loss” is inserted when it has previously been sold and you want to buy back at a higher price for – in fact – “stop the loss” in case the market has grown in the meantime.

In the case of a sales order, you enter a “stop loss” when you have previously purchased and want to sell at a lower price, always to “stop the loss”.

“Take profit” is used to bring home the profit, in the same previous cases, reversing the logic (you buy at a lower price than what you sold, it sells at a higher price than the one you bought).

It is not possible to insert conditional orders that sell / buy to the market: in these cases it is advisable to insert a very low or very high value to obtain the same result.

Example 1: I purchased 1 BTC for 400 EUR, and I want to be sure that if the market collapses at EUR 200, I close my position by selling 1 BTC, thus stopping the loss (“stop loss”). I will then insert a conditional sale order, with conditional price at EUR 200, at which my order will become operational and entered in the book. I will also specify the price at which I want to try the sale: if I enter a value of 300 EUR, the order will start at the 200 EUR of market value, but will be included in the book as a sales order with a limit price of 300 EUR.

Example 2: I want to sell 10 ETH if the price drops below 8.50 Euro per Ether. In this case, I have to create a sales order for 10 Ether – see image.

I select Stop_Loss, and insert two different prices: reconnecting to the short initial definition, the first price is Y. In this case, if the market price of an Ether falls below 8.51 Euro, the order will be placed on the platform. The second price is X: the order of sale of the 10 Ether will be inserted at a price equal to 8.49 Euro. Also, if I need it, I can add more details to the order, such as the number of days I’m going to keep it active.

1. Conditional orders are for experienced users only
2. Once the condition is reached, the order becomes active but there is no guarantee that it will be executed
3. It is advisable to appropriately differentiate the price of the order from that of the condition, taking into account that the market may be in an unfavorable condition