Risk management · Non-custodial

How to Set Take Profit and Stop Loss on Crypto Trades

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The difference between a profitable trader and a losing one isn't prediction accuracy. It's risk management.

The two most important tools for managing risk are take-profit (TP) and stop-loss (SL) orders. Here's how to use them — and why most beginners get them wrong.

What Does a Stop-Loss Do?

A stop-loss is an automatic exit order. It closes your position if the price moves against you by a specified amount.

If you buy ETH at $3,000 and set a stop-loss at $2,850, your position closes at $2,850 if the price drops there. You lose 5%, not 100%.

Without a stop-loss, your downside is liquidation. The exchange closes your position at whatever price it reaches — which could be far worse than the level you would have chosen.

What Does Take-Profit Do?

Take-profit is the opposite: it closes your position automatically when the price reaches your target.

If you buy ETH at $3,000 and set take-profit at $3,300, your position closes at $3,300 when the price gets there. You lock in a 10% gain without watching the screen.

Take-profit prevents the common mistake of riding a winner too long and watching it reverse.

The Mistake Most Beginners Make

Setting TP and SL based on how much they want to make or lose, rather than where the market actually is.

"I want to make $100" isn't a take-profit. "I want to lose no more than $50" isn't a stop-loss.

Good TP/SL levels are based on market structure:

• Stop-loss below support. Place it where the trade thesis breaks — a recent swing low, a key moving average, or below a consolidation zone.
• Take-profit at resistance. Place it where the price is likely to face selling pressure — a previous high, a measured move target, or a Fibonacci extension.

If you can't identify a logical level for your stop-loss, you don't have a trade setup. You have a gamble.

A Simple Framework

For every trade, answer three questions before entering:

1. Where does my thesis break? That's your stop-loss.
2. Where is the next resistance? That's your first take-profit.
3. What's the risk-reward ratio? If the potential reward isn't at least 2x the risk, skip the trade.

Example:

• Entry: ETH at $3,000
• Stop-loss: $2,850 (5% risk)
• Take-profit: $3,300 (10% reward)
• Risk-reward: 2:1 ✓

This is a trade worth taking. The math works even if you're wrong half the time.

How to Set TP/SL on Trending

On Trending, you set TP and SL directly on the chart:

1. Open a position
2. Drag the TP line to your target price
3. Drag the SL line to your invalidation level
4. Confirm

No order book. No separate form. The chart shows you exactly where your exits are relative to the current price.

The One Rule That Matters

Always set your stop-loss before you enter a trade. Not after. Not "once it moves in my favor."

If you can't define your risk upfront, you're not trading — you're hoping.

Try it on the chart →