Overview
- This article provides a comprehensive guide to the take-profit and stop-loss features in futures trading, helping users manage risk and lock in profits more effectively.
- The platform currently offers three take-profit and stop-loss methods: Position TP/SL, Partial TP/SL, and Trailing TP/SL.
- Whether you're a novice or a seasoned trader, take-profit and stop-loss features can enhance the safety and execution efficiency of your trades.
1. What is TP/SL?
Take-Profit (TP) refers to a common strategy in futures trading where a position is automatically closed when the market price reaches a predefined profit level, allowing users to realize gains and avoid giving back profits.
Stop-Loss (SL) is designed to minimize losses by automatically closing a position when the market moves unfavorably and hits a predefined loss threshold.
At Toobit, TP/SL orders are a type of strategy order. Users can preset trigger conditions and order prices. Once the mark price or last traded price meets the trigger conditions, the system will automatically place the order to the market for execution, achieving automated profit-taking or loss control.
In essence, TP/SL is a fundamental strategy to protect profits and manage risk. By setting predefined take-profit and stop-loss prices, traders can exit positions on time during favorable conditions and minimize losses in adverse markets—enhancing the overall stability of trading.
2.Types of TP/SL Orders
2.1 Position TP/SL
The Position TP/SL applies to your entire position, including existing holdings and any subsequent increases or decreases. When the current trading price or mark price reaches the trigger price, the system will place an order for the full position at the specified order price or the best available price. If the TP/SL order is triggered first, all other open orders for the position will be automatically canceled, and the TP/SL order will be executed to close the full position. If the position has already been fully closed, the TP/SL order will be automatically canceled.
Example: You currently hold a position of 1 BTC. If you've set a Position TP/SL and already have an unfilled limit order for 0.2 BTC, the system will automatically cancel the 0.2 BTC limit order when the TP/SL is triggered and proceed to close the full 1 BTC position. If the position is already closed when the TP/SL is triggered, the Position TP/SL order will be automatically canceled.
2.2 Partial TP/SL
When the latest traded price or mark price reaches your predefined TP/SL level, an order will be placed using either the specified order price or the best available market price, for the quantity you've set. If the TP/SL is triggered and your remaining position is less than the specified quantity, only the remaining position will be closed. Any other open orders associated with the position will remain active.
Example: If you hold a 1 BTC position and have set a Partial TP/SL for 1 BTC, while also having an unfilled limit order of 0.2 BTC, then when the TP/SL is triggered, only 0.8 BTC will be closed, and the 0.2 BTC limit order will remain active.
2.3 Trailing TP/SL
Trailing TP/SL refers to a strategy where the trader sets an order to be submitted to the market during a market pullback. Once the market price or mark price reaches a new high (or low) after the strategy is set, the system tracks this price. When the price reverses by the specified trailing deviation (e.g., 1%), a market order is submitted at the best available price (BBO). If the TP/SL is triggered and the remaining position is less than the set quantity, only the remaining position will be closed, while other open orders will remain active. View details
Example:
If you hold a 1 BTC position and have set a Trailing TP/SL for 1 BTC, along with an unfilled limit order of 0.2 BTC, then when the TP/SL is triggered, 0.8 BTC will be closed, and the 0.2 BTC limit order will remain.
3.When Should You Use TP/SL Orders?
In general, TP/SL orders are recommended when you're holding a position but may not be able to monitor the market continuously. As long as you have an open position, you can set TP/SL orders at any time according to your trading needs.
Please note that TP/SL orders are only applicable for closing positions and cannot be used to open new ones.
While TP/SL orders work effectively in most market conditions, they may fail to trigger under extreme market volatility. This is rare, but more commonly, price slippage may occur, causing the actual execution price to differ from the trigger price. In some cases, the order may be partially filled or not executed at all.
4.TP/SL Order Execution Logic
- Orders will not enter the market until the trigger price is reached. Once triggered, the system will submit the order at the preset order price.
- If the order is filled, the position will be closed (for TP/SL), or a new position will be opened depending on the order type. If not filled, the position and margin remain unchanged.
- If the order price exceeds system limits (e.g., above the max allowable price or below the minimum), the system will automatically adjust it to the nearest permissible price and submit the order.
- Before the order is triggered, positions and margin will not be frozen. However, TP/SL orders are not guaranteed to be triggered successfully. Order submission may fail due to factors such as price limits, position limits, insufficient margin, contract suspension, or system issues.
- Once triggered, a TP/SL order behaves like a regular limit order. It may not fill due to insufficient market depth or low liquidity. Unfilled orders will be displayed in the "Open Orders" section.
- During periods of high market volatility, orders may fail to execute or experience significant slippage. It is recommended to set appropriate trigger and order prices based on current market conditions.
- To quickly close a position, go to the "Positions" page, select the specific position, and click "Close".
We're always here to help. If you have any questions or feedback about this feature, please don't hesitate to reach out to our team through our dedicated Support Center.
Thank you for your trust and support.
Toobit Team
2025-07-15
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Risk Warning: The prices of digital assets may fluctuate significantly. The value of your investment may increase or decrease, and you may even lose the entire amount invested. You are solely responsible for your investment decisions, and Toobit is not liable for any losses that may occur due to the use of margin trading. This information should not be considered financial or investment advice. Please refer to our Terms of Use and Risk Disclosure for more details.