I have low IQ, can anyone teach me how stop losses work?

so how does the stop loss work with buy orders??

example?

im not margin trading

thanks but what if i want to use stop loss when i'm buying rather than selling?

in your first case once the market price (most recent trade) of the asset goes below two it triggers market orders at or better (above) your limit price until the amount of the asset you want to sell is completely sold

in the second, if the market price reaches or passes 1 then market orders will be triggered at 2 or better (below) until the amount you want to buy is completely bought

in a brokerage? all that does is allow market makers to see everything they can scoop up so they flash crash and then go back up.

long just means that your current position is ownership of the asset and short means your current position is having sold the asset, it doesn't necessarily have anything to do with margin trading or futures or anything

>in the second, if the market price reaches or passes 1 then market orders will be triggered at 2 or better (below) until the amount you want to buy is completely bought
but this user says there's no panic buy option on binance

>short means your current position is having sold the asset
no it means you borrowed shares to sell and owe them back. You're short the shares.

you can set a stop loss buy order as well

What you are thinking about is profit takeing?

You buy at 10 USD but want to sell at 12 USD if it gets there
So you want an order for profit takeing
I dont know if you can do that on binance, but you can do that on bitfinex for example
also there is something called trailing-stop-loss

This is barely English, but at least you tried. A stop-loss triggers a market sell when your target price hits. A limit order will remain open until someone fills it.

this exactly. Can it be made more clear? I don't think so. Any questions, OP?

my understanding was that if you want to shortsell a stock then ofc you need to borrow the shares if you don't already own them, but you can enter a short position (meaning you sold) on a base currency if you already own it, no need to borrow it

well i'm in ripple tright now, trading on the eth. XRP/ETH I have my stop set at 0.0019 ETH and the limit on that is 0.0021 which is basically the price i bought in at. 1k eoy btw

i dont know why all this is really so confusing to me. i dont even want to get into trailing-stop matters yet.

>I have my stop set at 0.0019 ETH and the limit on that is 0.0021
so if price goes to .0021 you market buy, otherwise if it reaches .0019 you just normally limit buy?

Buy scenario:
what if i want to buy a coin at 5 (now it's at 10).
set my stop at 5, where should i put my limit?

Sell scenario:
want to sell a coin at 10 (now it's at 5).
set my stop at 10, where should i put my limit?

a lot of the market runs on trading algos done by computers, a lot of them would likely hunt down your stop loss and then shot the price up to be honest.

>my understanding was that if you want to shortsell a stock then ofc you need to borrow the shares if you don't already own them, but you can enter a short position (meaning you sold) on a base currency if you already own it, no need to borrow it
If you're selling a stock you already own, then it's a regular sell. If you sell short, then you are borrowing the shares and owe them back. Basically, you borrow the shares, instantly sell them, and wait for the PPS to go lower so you can buy them back at a lower price and give back to the entity or brokerage you borrowed them from initially. You make the difference in profit.

>Buy scenario:
>what if i want to buy a coin at 5 (now it's at 10).
>set my stop at 5, where should i put my limit?
A stop is not necessary in this scenario as all you need is a limit order set at 5. A stop limit order is an option when you already own the coin or share and want to ensure it doesn't fall to, for example, 4 and you still hold it. A stop limit order will automatically sell the coins or shares you own at 5 if the price falls that low. It's an automation you can use when you can't sit around all day and watch. It's a safety net. A way to cut your losse automatically. A limit order, again, is different. A limit order is what price you are willing to pay for a buy order. Someone might fill it, or if it never gets that high, it won't get filled.

>Sell scenario:
>want to sell a coin at 10 (now it's at 5).
>set my stop at 10, where should i put my limit?

A stop is not used on selling for a higher price than current market value. A sell limit order is only used. Remember, a stop limit order is ONLY used as a sell to prevent holding a coin or stock that goes lower than what you're willing to tolerate. If you're wanting to buy a coin or stock, a stop is not in the vocabulary.

if the price goes to 0.0019 then it sets a buy order at 0.0021. HOPEFULLY the price goes up again somewhat after my stop is triggered, then I get to sell at a slight profit. The words we use for these terms could afford to be a bit clearer

I think OP is simply unaware that a stop limit order is different than a limit order. You don't have to do both. If it says "stop limit" that means sell at that price. He needs the "limit' slot. Not "stop limit".

Not OP, but can you recommend any newfag tier crypto books, reads, articles, sources, sites etc for someone complete braindead like me

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thank you for the explanation.
At this point i just dont understand why they have a stop-limit buy and a stop-limit sell option if, at the end of the day, you cant use it to buy or sell it but only when price falls during your buy or sell.

How far apart should Limit and Stop entries be?

so let me recap if i get this right.
Sell scenario (i already own coin):
Stop - 5
Limit - 4.5
want to sell at 5, but if price goes down, it'll market sell at 4.5

Buy scenario (I dont own a coin):
stop - 5
limit - 5.5
it will buy at 5 but then if price goes up it will buy it a higher market price instead?

lol what happens if you don't set a limit price?

also, should one always use a stop-limit order then instead of normal limit on binance?
whats the point of having both if stop-limit gives you this extra option ?

If it takes you this long to understand these basics, then please stop trying. Find a manual labor job.

Stop loss is literally just selling low. It doesn't make sense.

for longs and shorts my dude, to preserve the balance between bulls and el orso

You just hold it in your account forever.

>stop-limit buy
This shouldn't exist unless it's in reference to covering a short position I guess
>you cant use it to buy or sell
You can use it to sell. It will sell at a low price you set to prevent holding through a crash that goes way lower than your set lowest acceptable price

>Sell scenario (i already own coin):
>Stop - 5
>Limit - 4.5
>want to sell at 5, but if price goes down, it'll market sell at 4.5

This makes no sense to me. A stop (also called a stop limit) would be what you describe as a limit in this scenario. And a limit would be inapplicable. It sounds like you have it backwards. Your Stop would be 4.5 and your limit would be 5.

>Buy scenario (I dont own a coin):
>stop - 5
>limit - 5.5
>it will buy at 5 but then if price goes up it will buy it a higher market price instead?

A stop is not applicable in a buy scenerio. Stops are for when you already hold something and want set a safety net sell point in case of a crash. Has nothing to do with a buy (again, unless we're talking about a coin you're short on and set a stop because it goes too high and you need to cover before it gets higher than what you want -- but this is complicated so disregard).

>A stop is not applicable in a buy scenerio.
please explain then pic related

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I dunno man, that's weird. I'm used to how stocks use the term. I don't understand why you wouldn't simply place a limit order for .000170 BTC and by that. I'm not sure what the point is in triggering a limit order at a certain price when you could just buy it at that price with a standard limit order.

because its a stop, you can't enter markets on a stop only exit. I think you'd have to make your own bot for that and Im not sure but I think Finex has an option where you can enter when
>if price goes above X then Marketbuy Y amount

Stoplosses are a bit of a meme though especially when you're not on margin. SToplosses should only be used as a last measurement for protecting yourself. The problem with stops in an illiquid market is that you're very likely to get filled at the bottom or top.

actually wait, I kind of get it. You'd set your limit in that box as a lower price, assuming the stop price is a ceiling. Basically, if you chart, and the price hits a certain price, then you may be able to predict where it will fall after that, and can set your lower buy price. Like in this case the stop would be .000170 but your limit would be .000165 cause you know .000170 is a resistance so it might be forced back down. This would automatically trigger the trade.

long story short, I wouldn't worry about stop-limit buying from this platform. Just limits.

>The problem with stops in an illiquid market is that you're very likely to get filled at the bottom or top.
So much this, but with OP's image here I understand his confusion.

Its basically like this; stop: 170, limit 165, but the moment your stop hits a sell order is placed for 165 market selling your position essentially. Or you could put the limit order at 171 but you risk not being filled. So you have to ask yourself if you want to get filled immediatly or if you want to take your chance with being filled at possibly a smaller loss or break-even and saving a bit of fees along the way.

My tip is, use stops but learn yourself to close trades manually when you know you're wrong. You don't really need stops only as an automatic panic sell when things crash fast. My experience is that stops get filled at horrible places, you think you have a safe stop and you're all gucci but then when the move comes you find out it hit but it still needs to fill and you get filled at places where you might want to consider entering instead. So learn to close your trades, learn to be unemotional.

the most annoying thing is that they dont provide an example for the SELL scenario but only for buy.

>but the moment your stop hits a sell order is placed for 165 market selling your position essentially
But that's the thing, this is stop limit BUY not a sell. The stop triggers a BUY not a sell at the limit price.

very strange. Stops are overwhelmingly for a sell scenario.

nah you can't do that on Binance because there's no margin trading. A stop buy would assume you're in a short position and that's not possible. and as I said before you can't enter markets on stops, only exit.

Exactly, it implies a short position. But OP posted the proof here The stop price triggers the buy order at the desired limit price. The only sense I can make of it is

You got me I'm lost

right!? lol

Don't feel bad OP, that dynamic has confused even veterans. I totally understand if this has confused the fuck out of you lol

Just test whatever you think will happen with like 1 coin of some low sat shitcoin

using that pic as example, could you make a Sell scenario?

Well what happens if you change the limit slot in that image to LOWER than the stop price, does the pop up then say it will trigger a sell not a buy?

or make both prices equal; I would think it would then trigger the normal stop limit sell dynamic.