🔫Trigger Orders
Learn about conditional order types like Stop-Loss (SL) and Take-Profit (TP) on Blitz.
Summary
A trigger order, otherwise known as a conditional order, is a type of order placed with an explicit condition that must be met before the order is executed. These orders are set to automatically trigger a buy or sell action when the market reaches a specific price level, known as the trigger price.
Trigger orders can be beneficial for active traders, as they allow for predetermined entry and exit points based on market movements without the need for constant monitoring. As a result, trigger orders function as a key tool for risk management, applying conditional-based price event thresholds to managing open orders -- based on a given trader's preferences.
It's important to note that trigger orders do not guarantee trade execution at a specific price, especially in volatile markets where prices may change rapidly.
Trigger orders are common in both TradFi and crypto markets. For example, some of the most popular trigger orders include:
Stop-Market Orders: These are orders placed to buy or sell once the market reaches a specified price, known as the stop price. Once the stop price is reached, the order is triggered and becomes a market order to buy or sell at the best available price. Stop-market orders are not linked to existing (e.g., open) positions.
Stop-Loss Orders: Stop-loss orders are designed to limit potential losses by automatically triggering a market order when the price of an asset reaches a certain level. Stop-loss orders are linked to existing (i.e., open) positions.
Take Profit Orders: These orders are placed to automatically buy / sell an asset once it reaches a certain profit level. When the market price hits the specified take profit price, the order is triggered and becomes a market order to buy / sell. Take profit orders are linked to existing (i.e., open) positions.
Example: Stop-Market Order
Imagine you're a Bitcoin (BTC) trader and you've noticed a pattern that whenever BTC's price drops to $50,000, it tends to bounce back up. You want to take advantage of this trend but don't want to sit in front of your computer 24/7 waiting for the BTC price to hit the $50,000 mark.
So, you decide to set a stop-market order with a trigger price of $50,000.
If the current price of BTC is $55,000 and you set a stop-market order to buy at $50,000, once BTC''s price reaches the $50,000 price, your market buy order will be triggered automatically.
Here's how it works:
BTC's price starts at $55,000.
You place a stop-market order to buy 1 BTC at the $50,000 trigger price.
BTC's price drops to $50,000.
Your stop-market order is triggered, and it becomes a market order to buy 1 BTC at the best available price around $50,000.
Using a stop-market order, traders can capitalize on the expected upward trend without constantly monitoring the price. Notably, stop-market orders are not linked to existing, open positions -- they are new orders to buy / sell an asset at a prescribed price level.
Bear in mind that if the market is highly volatile or experience a sudden drop, then the execution price might differ from the trigger price.
Trigger Orders on Blitz
Traders can make use of trigger order types on Blitz to maximize their trading experience.
Let's examine how trigger orders work on Vertex in more detail.
How Trigger Orders Work
Trigger orders are sent to Blitz's trigger order service. If the trigger price level is reached, the order will automatically be executed on behalf of the user.
As a result, One-Click Trading mode switched to ON is required to use trigger orders on Blitz.
Types of Trigger Orders
Vertex currently supports the following trigger order types:
Stop-Market Orders
Take Profit Orders
Stop-Loss Orders
Blitz cannot guarantee that a trigger order will execute in every case.
Stop-Market Orders
A stop-market order on Blitz enables you to set a trigger price, that once reached, will execute a market order for the direction and size of your order.
Stop-market orders can be placed the same way that Market and Limit orders are placed on the trading page.
Stop-market orders are new orders that are NOT linked to an existing position.
Stop-market orders will only be triggered if the Last Price for the market reaches the trigger price and if the order can fully fill (see slippage).
A stop-market order will NOT auto-cancel if you add or reduce a position's size for that market
Stop-market orders are Fill or Kill (FoK) -- meaning that if the order does not fill entirely, it will be canceled. There are no partial fills.
For more details on placing and managing stop-market orders, please refer to the tutorial here.
Slippage Tolerance for stop-market orders is configurable under the "Settings" button on the trading panel. In the case where a stop-market order can't fill the full order amount, the order will fail to execute.
Take Profit (TP) Orders
Orders that are placed to automatically close / exit a position a profitable position once it reaches a certain price level. For example, if a long BTC position is in profit and the market price hits the specified take profit (TP) price set by the trader, then the order is triggered and becomes a market order to sell BTC at the prescribed price.
Take Profit (TP) orders can be placed for existing (i.e., open) perpetual positions.
TP orders are classified as "Taker" orders as they take existing liquidity from the orderbook to fill the market order at the best available price.
Users can select whether they want to base the trigger price on the Mark / Oracle Price or Last Price.
Oracle Price: Oracle price from other exchanges.
Last Price: Last-traded price on Blitz.
TP orders can only be set for the entire notional size of an existing position.
TP orders execute in the opposite direction of the existing position to which they are applied.
TP orders are Fill or Kill (FoK) -- meaning that if the order does not fill entirely, it will be canceled. There are no partial fills.
For more details on placing and managing take profit orders, please refer to the tutorial here.
Slippage Tolerance for take profit (TP) orders is configurable under the "Settings" button on the trading panel. In the case where a TP order can't fill the full amount, the order will fail to execute.
Stop-Loss (SL) Orders
Stop-loss (SL) orders are designed to limit potential losses by automatically triggering a an order to close / exit an open position when the price of an asset reaches a certain level. SL orders are a highly popular tool for managing risk when trading, often functioning as a means to cut losses on a bad trade and defend a position from liquidation.
Stop Loss (SL) orders can be placed for existing (i.e., open) perpetual positions.
SL orders are classified as "Taker" orders as they take existing liquidity from the orderbook to fill the market order at the best available price.
Users can select whether they want to base the trigger on the Mark / Oracle Price or Last Price.
Oracle Price: Oracle price from other exchanges.
Last Price: Last-traded price on Blitz.
Can only be set for the entire notional size of an existing position.
SL orders execute in the opposite direction of the existing position to which they are applied.
SL orders are Fill or Kill (FoK) -- meaning that if the order does not fill entirely, it will be canceled. There are no partial fills.
For more details on placing and managing stop-loss orders, please refer to the tutorial here.
Slippage Tolerance for stop-loss (SL) orders is configurable under the "Settings" button on the trading panel. In the case where a SL order can't fill the full amount, the order will fail to execute.
Tool-tips on the Blitz app will inform users about the details of a given trigger order type, including slippage tolerance parameters, before placing an order.
*Blitz users are strongly advised to monitor their trigger orders and manage their risk accordingly.
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