Limit and stop orders in crypto trading and the advantages

If you are familiar trading on spot trading, Limit and stop orders won't be a new to you because they are two types of orders commonly used in crypto trading except if you don't know about it or don't know the reason they are there in trading.

Limit orders and Stop orders are tools, Yes! let me call it tools, that help traders to manage risk and also take advantage of crypto market. This tools allows traders to set a specific criteria for their buying and when they want to sell.

The two orders have different use case which I'm going to explain in this post.

As an investor or trader you have right to choose the specific price you want to buy or sell and that is the reason why we have limit order in crypto trading. Limit order gives trader to set a specific price better for them. For example, if you want to buy hive at 30 cent or less and presently the price of hive hovering at 33 cent, you can place a limit order to buy at that 30 cent or less. Probably if the price of hive drop to that 30cent, your order will be filled. But if the price not drop to 30cent, your order will be in pending and not going to filled.

While....

A stop order is an order that quite different to Limit order. This order also allows traders to sell and buy cryptocurrency like Limit, but this help to limit traders losses. For example if the market is not stable, or maybe you are noticing the price of cryptocurrency you own is somehow fluctuating, you can place a stop order to sell if the price drops to a certain point. And of the price of the cryptocurrency drop to that point your stop order will trigger and your coin will be sold. Stop order help a lot to mitigate the risk in crypto trading, most especially those that dont have time to keep eyes on the market.

So what are the benefits of using orders in trading

Benefits of using Limit and Stop orders

I have already mentioned some of the risk in the above paragraph but i will likely want to go into deep with it.

1: Control Risk: One of the main benefits of orders in crypto trading is that these orders help traders to deal with volatility in crypto market by helps them to manage their risk. Traders use stop order to limit their losses if the crypto price is dropping, many traders use it to protect their investment and significant future losses when crypto market is FUD.

2: Market Opportunity: Orders such as Limit help traders to look into the market and take advantage of market opportunities. Traders can set a price at which they want to buy or sell. I think over a week now I used limit order on binance to set when I want to sell my hive, I need a system urgently but the Hive there was not enough, so I want to maximize it. However due to binance issue with SEC, I thought anything might comeup and think of removing my holding from binance.

Therefore, I remember there is limit order at @ecency, so I withdraw it from binance and place it in limit order on @ecency marketplace by setting to sell at 40cent. I do it to maximize my gain and also do it minimize my losses.

3: Trading Decision: Limit and stop order helps trader that have difficult in taken decision. By using orders, traders who are highly emotional on trading decision will be safe. As we know trading decision is very important in crypto trading and to avoid poor decision making using limit and stop order will help traders to execute trades based on the criteria being set rather than making impulsive decisions or following the market ups and downs.

4: Time and Effort: Limit and stop orders can help traders save time and effort. I believe anyone putting it money on risk investment have to take time to strategies not to losses the money. Honestly trading cryptocurrencies is a time consuming activity that requires you to monitor of market condition because of your money in it. But using limit and stop order it will save traders time and save more time to focus on other important activity than constantly checking of the market.

5: Trading Improvement: Finally using orde in crypto trading can help traders to trade more efficiently and effectively reduce the risk in trading, likewise have a successful trading experience.

N.B. Limit and Stop order doesn't guarantee success, crypto market can be frustrating market that unexpected events can occur, it is better to be well strategies while trading crypto.