Binance Futures or a CFD broker’s trading platform usually stop the loss and take profit on every trade. However, on Spot Binance, there is only one trade to place regular orders. So when you trade on Binance, do you want to set a profit? The following article shows how to profit when trading spot on Binance.
Table of Contents:
What is a pending profit order on Binance?
A pending order to take profit is a pending order that allows you to automatically close a trade when a preset profit level has been reached. With a previous BUY order on Binance, you make profit using a SELL Limit order. The price of the pending limit order is higher than the entry price. Conversely, if there is a SELL order on Binance, the take-profit order uses a BUY Limit order with a limit order price lower than the entry price.
Why place a take-profit order?
Placing a take-profit order helps users preserve the profit of the trade when the price has reached the expected level at any given time. The cryptocurrency market is often volatile and constantly evolving. When executing a transaction, if the price has reached the expected profit level, the take profit order helps to secure such a trade.
If there is no take profit order after the bull market, the cryptocurrency will plummet and it may take a long time to return to the previous price increase. If users do not continuously monitor the market and do not set profits, they may lose time taking profits.
How to take profit on Spot Binance?
To set up take profit for spot trading on Binance, users can use the Limit order. Suppose a user needs to profit for a BUY BTC/USDT order. That is, users have to take profits on USDT after the increase in the price of BTC. Therefore, you need to place a SELL limit order for the BTC/USDT pair.
- Log in to your Binance account, click on the Trade tab and select Classic (or Advanced depending on the interface the user prefers to use).
- Select the coin pair you want to profit from: BTC/USDT
- If you want to set a take profit for a BUY order, select the Limit tab
- In the SELL window, enter the price you want to make profit in the Price box. This price must be higher than the current price and higher than the entry price.
- Enter the volume of BTC you want to take profit or drag the horizontal bar below to choose the percentage of BTC volume you want to take profit.
- Click SELL BTC
After placing an order, the order you just placed will be displayed in the pending orders window [Open Order]. If you want to cancel the take-profit order you just placed, click the [Cancel] symbol at the end of the order line.
The user has a SELL BTC/USDT order and needs to set up a take profit. You must place a BUY limit order for the BTC/USDT pair. Then, the Price box must enter the price below the current price and lower than the entry price.
How to get profits and stop loss with OCO order on Spot Binance?
At Binance Spot, you can make a combined stop loss and take a profit order using an OCO order. As when using Limit orders, when there is a BUY order, you need to use a pending SELL OCO order to make a stop loss and take profit. And when you need to set the stop loss, take profit for the SELL order, you need to use the BUY OCO order. Proceed as follows:
- On the Trade tab, select Classic or Advanced.
- Select a trading pair.
- In the Spot Order window, click the small triangle in the order type selection section and select OCO.
- In the Price box, enter the take profit price.
- In the Stop box, enter the price to trigger the stop loss order.
- In the Limit box, enter the stop loss price.
- In the Amount box, enter the order volume you want to enter stop loss and take profit.
- Click SELL BTC to confirm a stop loss combined with profit taking for a previously executed Buy BTC order.
Conclusion: some experience in taking profit
When making a trade, the user must define the expected stop loss and take profit points in advance. This helps to ensure that the trading plan is correct. However, the ratio between the insertion of a stop loss, the take profit should be appropriate. If the take profit is too close, the profit margin may not cover the transaction costs. If the take profit is too far away and the transaction cannot execute the take profit order before the market reverses, it will not implement the trading plan. Once you have determined the ideal take profit level, make sure you do not change the rules so that the trading sentiment does not change as the market moves.