MDM’s stop-loss order is an automated order placed to buy or sell a specific cryptocurrency once the cryptocurrency reaches a certain price. For example, when you buy Litecoin (LTC) for $180, when the price goes down by 10%, you can automatically sell it. This will limit your loss to 10%.
Suppose you purchased Stellar (XLR) at $.50 per share. You enter a stop-loss order for $.25. If it falls below $.25, your coins will then be sold at the prevailing market price.
You can also do it for gains through the Auto Order feature.
When you buy Litecoin (LTC) for $180 and the price goes up by 10%, you can automatically sell it. This will guarantee your 10% gains.
Suppose you purchased Stellar (XLR) at $.50 per share. You can automatically sell when it reaches $1.
Advantages of the Stop-Loss Order/Auto-Order Feature
Limits losses and guarantees opportunities for gains. The most important benefit of a stop-loss order is that it limits your possible losses.
You can examine your tolerance and lose no more than that. It can also guarantee your opportunities for gains. Cryptocurrencies are volatile and will remain so for a long time. Prices could double in a blink of an eye and then crash just as fast. What if you are not online when your asset hits your target?
With MDM, you don’t have to worry about that. You can buy and let the platform work for you.
You can be more objective this way. Watching the charts 24/7 could give you anxiety or get you attached to a crypto especially when it’s climbing up.
With MDM, you can set a target, stick to it, and let the platform implement it for you.
It also costs nothing to implement. Your regular commission is charged only once the stop-loss price has been reached and the coin must be sold.
At the end of the day, if you are going to be a successful crypto trader, you have to be confident in your strategy. This means carrying through with your plan.
It does not guarantee gains
MDM’s stop-loss orders and auto order do not guarantee you’ll make money. It will offer you an opportunity to limit your loss and secure opportunities for gains but does not guarantee the circumstances that will give you a chance to gain.
Cryptocurrencies are volatile. You still have to do your due diligence and invest in cryptocurrencies that you believe in.
Disadvantages of Stop-Loss Orders
One disadvantage of a stop-loss order is that it does not allow for short-term fluctuation which is common on all cryptocurrencies.
Setting a 10% stop-loss order on a stock that has a history of fluctuating 20% or more in a week may just ruin your chances of gains. You’ll most likely just lose money on the commission generated from the execution of your stop-loss order.
The key is picking a stop-loss percentage that allows for fluctuations but that requires a lot of study.
There are no hard-and-fast rules for the level at which stops should be placed. It totally depends on your individual investing style.