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RE: Crypto Academy - Season 3 - Week 2 - Homework Post for professor @cryptokraze homework by @hadassah26
Hi @jehoshua-shey, this is a sell trade so it is the inverse of what I think you are thinking.
Steem on.
That's fine but please,
What is a sell trade? And what is stoploss?
@hadassah26
With Contract for Difference Brokers, sell trades can be placed( This involves borrowing a certain amount of currency from the broker and selling at a specific price).
This way, if the trades goes in the bearish direction, you make a profit and pay the broker their "spread".
Regular CFD brokers include FXTM, Hotforex, Deriv etc.
A stop loss on the other hand is a risk mitigation tool used by traders to close trades when price goes against them, this which are either buy or sell trades.
Using a stop loss traders no longer have to be there to close the trades manually, also it helps them set risk to reward ratios and remove emotions when closing trades.
I hope I have been able to answer you correctly sir.
How do you make profit from selling at a lower price?
You borrow BTC @ $34k and sell it @ $32k, where's the profit coming in from?