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RE: Crypto Academy - Season 3 - Week 2 - Homework Post for professor @cryptokraze homework by @hadassah26
Hello @hadassah26
I'm in a bit of disagreement with you here
From this image below,
You said
I place my take profit at “d”. So as soon as market hits there I take my profit.
I also put a stop loss at "e" a little above my Lower High, incase market makes a U turn, I can mitigate loss.
You can use an OCO order to do the two alright, but your stoploss can't be above your profit point. Stoploss is lower to minimize loss as price dips while profit should be higher incase or should the price move up instead.
Steem on.
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?