What is a stop order?
Understanding Stop Buy and Stop Sell Orders in Cryptocurrency Trading
A stop buy order is an order to purchase a cryptocurrency when it reaches a certain price. For example, if you placed a stop buy order for bitcoin at $10,000, you would be willing to buy bitcoin if the price increases to $10,000 or higher. If the price of bitcoin increases to $10,000 or higher, your stop buy order will be filled and you will purchase bitcoin at the market price.
A stop sell order is an order to sell a cryptocurrency when it reaches a certain price. For example, if you placed a stop sell order for bitcoin at $10,000, you would be willing to sell bitcoin if the price drops to $10,000 or lower. If the price of bitcoin drops to $10,000 or lower, your stop sell order will be filled and you will sell bitcoin at the market price.
Stop orders can be useful for traders who want to set specific price targets for buying or selling a cryptocurrency. They can also help to protect against potential losses by allowing traders to specify the minimum price they are willing to sell a cryptocurrency for or the maximum price they are willing to pay for it. However, it is important to note that stop orders may not always be filled, particularly if the market price of the cryptocurrency does not reach the specified stop price.
Pros of a stop order:
- Allows you to set specific price targets for buying or selling a cryptocurrency.
- It protects against potential losses by allowing you to specify the minimum price you are willing to sell a cryptocurrency for or the maximum price you are willing to pay for it.
- It can help you to lock in profits or minimize losses.
Cons of a stop order:
- It may not always be filled, particularly if the market price of the cryptocurrency does not reach the specified stop price.
- It may require you to constantly monitor the market and adjust your stop orders as the price of the cryptocurrency changes.
How do I place a stop order on Ndax?
Desktop
- Go to the Ndax website (https://ndax.io/) and log in to your account.
- Once you are logged in, you will be taken to your dashboard.
- On the left-hand side of the dashboard, click the TRADE button.
- On the trade page, you will see a BUY and SELL button on the right side of the screen. If you want to buy a cryptocurrency, click the BUY button. If you want to sell a cryptocurrency, click the SELL button.
- To select the cryptocurrency/CAD pair you want to trade, click the small grey arrow in the upper left corner of the screen. From the dropdown menu, select the desired pair.
- To place a stop order, click the STOP button.
- In the ORDER SIZE field, enter the amount of cryptocurrency you want to buy or sell.
- In the STOP PRICE field, enter the specific price at which you want the order to be filled. This should be the minimum price you are willing to sell for a sell order or the maximum price you are willing to pay for a buy order.
- Once you have entered the necessary information, click the PLACE BUY/SELL ORDER button to submit your stop order.
To learn more about Stop Orders, check out our blog:
Advanced Trading: Bitcoin Stop Orders