A Trailing order can be thought of as a modified version of a Stop Loss or a Take Profit order. In a nutshell, a Trailing order follows (trails) the Spot price at a specified distance. It automatically adjusts itself and steadily follows the market’s price movement as long as it moves in the chosen direction.
Trailing orders can offer greater peace of mind and increased flexibility. The Trailing order moves by a specified percentage or amount when the price favors the trader. A Trailing order enables you to limit losses and settle on profits by steadily following the price movement. Your profit will be locked and the trade will remain open as long as the price moves in the desired direction.
The ability to choose between a Trailing Buy or a Trailing Sell allows higher mobility when managing your Nexo Pro portfolio.
How to place a Trailing order
1. First, you should navigate to the Spot Exchange.
2. From there, you have to select the dropdown arrow at the ‘Trailing’ order type, as illustrated:
3. Then, you can choose between Price Distance (Option 1 on the image) or % Distance (Option 2). One is a static number (e.g. 1,000 USDT) and the other a fixed percentage (e.g. 5%). Keep in mind that the current Spot price will be used to place the order and you can decide what amount to enter with.
Entering a position with a Trailing Buy
Utilizing a Buy strategy enables you to trigger an order when the market turns around from a decline, increasing your odds of purchasing at a beneficial price To demonstrate the underlying mechanisms of the Trailing Buy order, we will use this example:
Suppose you have 28,000 USDT and would like to buy Bitcoin at the best possible price. Knowing that the current price of 1 BTC is 25,000 USDT, you place a Trailing Buy order at a 10% Price Difference.
In this particular example of a Trailing buy order, when the BTC price decreases to X USDT, the Buy price will be recalculated at X + 10%. However, when the BTC price goes up, the Buy Price will remain at its latest value (X + 10%). The order will be filled when the latest Buy Price matches the current BTC price.
Here is how things work out:
Step | Current price of 1 BTC | Buy Price | Buy Price Status |
1 | 25,000 | 27,500 | Initial |
2 | 26,300 | 27,500 | Unchanged |
3 | 24,500 | 26,950 | Recalculated |
4 | 23,000 | 25,300 | Recalculated |
5 | 24,000 | 25,300 | Unchanged |
6 | 22,800 | 25,080 | Recalculated |
7 | 22,500 | 24,750 | Recalculated |
8 | 24,000 | 24,750 | Unchanged |
9 | 24,500 | 24,750 | Unchanged |
10 | 24,750 | 24,750 | Price match |
In the end, the buy order for 1 BTC is filled at the price of 24,750 USDT, as this value matches the latest recalculated Buy Price. Here is an in-depth explanation of each step:
- Step 1: The order is placed at 25,000 USDT price for 1 BTC and the Buy Price condition is 25,000 + 10% = 25,000 + 2,500 = 27,500 USDT.
- Step 2: The price of Bitcoin increases to 26,300 USDT. In case of a Trailing buy order, when the price of the asset we wish to purchase goes up, the Buy price remains the same: 27,500 USDT.
- Step 3: The price of BTC decreases to 24,500 USDT, which is below our initial value of 25,000 USDT. Thus, the Buy Price will be recalculated: 24,500 + 10% = 24,500 + 2,450 = 26,950 USDT.
- Step 4: The price of BTC falls to 23,000 USDT. Therefore, the Buy Price will be updated once again. The new Buy Price will be 23,000 + 10% = 23,000 + 2,300 = 26,300 USDT.
- Step 5: The price of BTC increases to 24,000 USDT, hence there will be no change in the Buy Price. It will remain at 26,300 USDT.
- Step 6: The BTC price goes down to 22,800 USDT, which is below the last price of 23,000 USDT. Thus, our new Buy condition (Buy Price) will be 22,800 + 10% = 22,800 + 2,280 = 25,080 USDT.
- Step 7: The price of BTC drops to 22,500 USDT. Our new Buy Price is 22,500 + 10% = 22,500 + 2,250 = 24,750 USDT.
- Step 8: The BTC price increases to 24,000 USDT and the Buy price remains at 24,750 USDT.
- Step 9: The BTC price further increases to 24,500 USDT. The Buy Price remains unchanged: 24,750 USDT.
- Step 10: The price of BTC hits 24,750 USDT. This value matches our latest Buy Price, calculated in Step 9. A Market Buy order is triggered at 24,750 USDT for 1 BTC.
Entering a position with a Trailing Sell
The Trailing Sell strategy enables you to trigger an order when the market takes a downturn, increasing your odds of making a profit at the highest possible price. To demonstrate the underlying mechanisms of the Trailing Sell order, we will use this example:
Suppose you have 1.17 BTC worth 28,000 USDT and would like to sell most of it, or more precisely 1 BTC, at the best possible price. Knowing that the current price of 1 BTC is 24,000 USDT, you place a Trailing Sell order at a 7% Price Difference.
In this particular example of a Trailing sell order, when the BTC price increases to X USDT, the Sell Price will be recalculated at X – 7%. However, when the BTC price goes down, the Sell Price will remain at its latest value (X – 7%). The order will be filled when the latest Sell Price matches the current BTC price.
Here is how things work out:
Step | Current price of 1 BTC | Sell Price | Sell Price Status |
1 | 24,000 | 22,320 | Initial |
2 | 23,500 | 22,320 | Unchanged |
3 | 24,300 | 22,599 | Recalculated |
4 | 26,700 | 24,831 | Recalculated |
5 | 25,500 | 24,831 | Unchanged |
6 | 27,300 | 25,389 | Recalculated |
7 | 29,350 | 27,296 | Recalculated |
8 | 28,670 | 27,296 | Unchanged |
9 | 27,850 | 27,296 | Unchanged |
10 | 27,296 | 27,296 | Price match |
In the end, the sell order of 1 BTC is filled at the price of 27,296 USDT, as this value matches the latest recalculated Sell Price. Here is an in-depth explanation of each step:
- Step 1: The order is placed at 24,000 USDT price for 1 BTC and the Sell Price condition is 24,000 – 7% = 24,000 – 1,680 = 22,320 USDT.
- Step 2: The price of Bitcoin decreases to 23,500 USDT. In case of a Trailing sell order, when the price of the asset we wish to sell goes down, the Sell price remains the same: 22,320 USDT.
- Step 3: The price of BTC increases to 24,300 USDT, which is above our initial value of 24,000 USDT. The Sell Price will be recalculated: 24,300 – 7% = 24,300 – 1,701 = 22,599 USDT.
- Step 4: The price of BTC further increases to 26,700 USDT. Therefore, the new Sell condition will be 26,700 – 7% = 26,700 – 1,869 = 24,831 USDT.
- Step 5: The BTC price drops to 25,500 USDT. The Sell Price remains unchanged: 24,831 USDT.
- Step 6: The price of BTC goes up to 27,300 USDT. Thus, our new Sell condition is 27,300 – 7% = 27,300 – 1,911 = 25,389 USDT.
- Step 7: The price of BTC further increases to 29,350 USDT. The Sell Price will be recalculated as 29,350 – 7% = 29,350 – 2,055 = 27,296 USDT.
- Step 8: The BTC price decreases to 28,670 USDT. The Sell Price remains at 27,296 USDT.
- Step 9: The BTC price goes down to 27,850 USDT and again the Sell Price remains unchanged: 27,296 USDT.
- Step 10: The BTC price hits 27,296 USDT. This value matches our latest Sell Price, calculated in Step 9. A Market Sell order is triggered at 1 BTC = 27,296 USDT
Combining Trailing and Stop Loss or Take Profit orders
With a Take Profit order, the idea of the trade is to aim for an upward price trend and break high (that is, to sell at a higher price and make a profit). In the case of Stop-Loss orders, the aim is to minimize the losses. However, in both Take Profit and Stop-Loss orders, you are limited to the Trigger Price selected. A Trailing Sell order, on the other hand, locks in profit and limits losses at the same time. When the price of the asset increases, it pulls the trailing Sell Price along with it. However, when the asset’s price decreases, the stop-loss price (Sell Price) does not change: it remains at the previous level, thus locking in profits and protecting you from losses as the price reaches new peaks.