Stop Loss and Take Profit are tools designed to help you manage risk and automate the sale of your investments. Whether you want to limit potential losses or secure profits, these orders allow you to define in advance how to act when the market reaches specific price levels.
What is a Stop Loss? A Stop Loss is an automatic sell order that helps you limit losses on an investment. By setting a trigger price, the order will execute automatically when the market reaches that level. Its goal is to help you manage risk without the need to constantly monitor market movements.
What is a Take Profit? A Take Profit is an automatic sell order that allows you to lock in profits from an investment. By setting a target price, the position will be sold automatically when the market reaches that level. This enables you to consolidate your gains without having to continuously monitor the market.
How do these orders work? 🔄
Both Stop Loss and Take Profit are fixed orders: the trigger price stays the same until you modify or cancel the order, even if the market moves. You can set both in two ways:
By price: enter the exact price at which you want the order to execute.
By percentage: enter the % change you want, and the trigger price will be calculated automatically.
Stop Loss 🔻
Stop Loss by price
Example: Imagine you buy 8 HeyTrade shares at €50 per share. You are willing to accept a maximum loss of €10 per share, so you set a Stop Loss order to sell at €40. If the price drops to €40, the order will execute automatically.
Stop Loss by percentage
Example: Imagine you buy 8 HeyTrade shares at €50 per share. Instead of entering a price, you set a Stop Loss of 20%. The trigger price will be €40. If the price drops to that level, the order will execute automatically.
Take Profit 🟢
Take Profit by price
Example: Imagine you buy 8 HeyTrade shares at €50 per share. You consider that making a profit of €25 per share is a realistic goal, so you set a Take Profit order to sell at €75. When the price reaches that level, the order will execute automatically.
Take Profit by percentage
Example: Imagine you buy 8 HeyTrade shares at €50 per share. Instead of entering a price, you set a Take Profit of 50%. The trigger price will be €75. When the price reaches that level, the order will execute automatically.
We hope you found this information useful. If you have any questions, please reach out via our in-app chat or email us at support@heytrade.com. We will be delighted to help! 😊