I. What is TP/SL?
TP/SL (Take Profit/Stop Loss) is a popular futures trading strategy:
1. TP: Enables traders to lock in their unrealized profits by closing their positions at a predetermined price.
2. SL: Safeguards traders' portfolios by automatically closing positions when the price reaches a specific level, thus minimizing the risk of further losses.
BingX offers the TP/SL feature, allowing users to set their desired TP/SL price. Once the market price reaches the pre-determined TP/SL level, your positions will be automatically closed based on the TP amount you have set.
TP/SL may fail to be triggered due to factors such as price limits, market depth, non-tradable contracts, and system issues.
2. Why was there slippage when my TP/SL market order was filled?
Market orders will be executed at the best price available in the order book, eliminating the need to set your own price and allowing orders to be filled quickly. While market orders guarantee the speed of the order execution, they do not guarantee a specific price. If the order is too large, it will be matched with multiple orders with different prices in the order book until all transactions are completed, which also causes Slippage.
To prevent slippage, you have the option to enable "Guaranteed SL" when setting up SL. This ensures that your order will be filled at the pre-set price. BingX has introduced the exclusive Guaranteed SL feature to provide price certainty for SL orders and Trigger orders. The feature is currently available for the following trading pairs: BTC, ETH, XRP, SOL, LTC, BCH, ADA, BNB, MATIC, RNDR, DOGE, and LINK. We are working to expand our support for more trading pairs, please stay tuned for updates!
Note: For risk control, there is a protection system to limit the fill price range of market orders. When a market order is filled, its price is allowed to deviate by a certain threshold from the market price. The excess part of the order will be automatically canceled by the system.
3. Why wasn't my TP/SL order filled despite the market price reached my trigger price?
TP/SL limit orders are Limit orders that will be executed automatically by the system according to the preset order price when the market price reaches the trigger price. Please note that a Limit order will only be filled if there is an order in the order book with a price that is equal to or better than your preset order price.
In the event of sharp market fluctuations, where the market price quickly moves beyond the predetermined price, it may result in failed or incomplete execution of the placed order. In this case, it's important for you to assess your risk tolerance and decide whether to wait for the order to be filled or cancel the order.
III. When Should I Take Profit or Stop Loss?
In general, traders may consider setting up TP/SL when they hold positions and find it challenging to accurately predict long-term market trends. To mitigate the risk of forced liquidation, we strongly recommend setting SL for all your positions.
IV. How to Use TP/SL?
Instructions:
You can set TP and SL simultaneously when opening Perpetual Futures positions. Please follow the steps below:
1. Enter order information, check "TP/SL" and click "Advanced" to complete the settings.
2. On "Take Profit/Stop Loss" page, you can set the trigger price and order price.
(1) Trigger price: The predetermined price that activates a TP/SL order. Once the market price reaches the trigger price, the TP/SL will be triggered. You can use Last Price, Mark Price, or Index Price as the trigger price.
(2) Order price: The price at which your order will be placed.
User Scenarios:
Scenario 1. Close a long position with a TP or SL order
John opens a long BTC contract at the price of 20,000 USD and expects to close the long position to stop losses when the market price drops to 16,000 USD. John sets SL according to parameters as shown below:
Trigger price: 16,000 USD
Order price: 15,950 USD (When selling out, it is preferred to set the order price lower than the trigger price by a certain degree to ensure the order will be filled promptly. Choosing the market price is also recommended.)
If the price falls to 16,000 USD, the SL order will be triggered, and John's long position will be closed at 15,950 USD. (If the order price is set as the market price, the position will be closed at the market price immediately.)
If John wants to close his long position and lock in his gains, he can set up TP with the trigger price somewhere higher than 20,000 USD.
Scenario 2. Close a short position with a TP or SL order
John opens a short BTC contract at the price of 20,000 USD and expects to close the short position to stop losses when the market price rises to 22,000 USD. John sets SL according to parameters as shown below.
Trigger price: 22,000 USD
Order price: 22,050 (When buying in, it is preferred to set the order price higher than the trigger price by a certain degree to ensure the order will be filled promptly. Choosing the market price is also recommended.)
If the market price goes up to 22,000 USD, the SL order will be triggered and John's short position will be closed at 22,050 USD. (If the order price is set as the market price, the position will be closed at the market price immediately.)
If John wants to close his short position and lock in his gains, he can set up TP with the trigger price somewhere lower than 20,000 USD.
Scenario 3. Close a long position with a TP order and an SL order
John opens a long BTC contract at the price of 20,000 USD and expects to take profits when the market price rises to 22,000 USD and to stop losses when the market price drops to 18,000 USD. John sets both TP and SL according to parameters as shown below.
TP trigger price: 22,000 USD
TP order price: 21,950 USD (any price lower than the trigger price, or choose the market price)
SL trigger price: 18,000 USD
SL order price: 17,950 USD (any price lower than the trigger price, or choose the market price)
If BTC's market price rises to 22,000 USD, TP will be triggered, and John can close his position at the preset TP order price of 21,950 USD (or at the market price instantly if the order price is set to the market price). At the same time, the SL order with a trigger price of 18,000 USD will be canceled. If BTC's market price drops to 18,000 USD, SL will be triggered, and John can close his position at the preset SL order price of 17,950 USD (or at the market price instantly if the order price is set to the market price). Meanwhile, the TP order with a trigger price of 22,000 USD will be canceled.
Scenario 4. Close a short position with a TP order and an SL order
John opens a short BTC contract at the price of 20,000 USD and expects to take profits when the market price drops to 18,000 USD and to stop losses when the market price rises to 22,000 USD. John sets both TP and SL according to parameters as shown below.
TP trigger price: 18,000 USD
TP order price: 18,050 USD (any price higher than the trigger price, or choose the market price)
SL trigger price: 22,000 USD
SL order price: 22,050 USD (any price higher than the trigger price, or choose the market price)
If BTC's market price drops to 18,000 USD, TP will be triggered, and John can close his position at the preset TP order price of 18,050 USD (or at the market price instantly if the order price is set to the market price). At the same time, the SL order with a trigger price of 22,000 USD will be canceled. If BTC's market price rises to 22,000 USD, SL will be triggered, and John can close his position at the preset SL order price of 22,050 USD (or at the market price instantly if the order price is set to the market price). Meanwhile, the TP order with a trigger price of 18,000 USD will be canceled.
V. TP/SL Can Only Be Used to Close Positions?
Yes. The TP/SL orders placed after triggering can only be used for closing positions.
VI. Are TP/SL Orders Tied to Existing Positions?
Yes, TP/SL and the orders placed after TP/SL triggering are based on your current positions. Without any open positions, setting TP/SL orders isn't possible. You can configure the TP/SL amount based on the available amount of your existing position.
To illustrate, if you hold a position of 50 BTC, your maximum allowable TP/SL amount is 50 BTC. Should you close 10 BTC from that position through any method, the available amount of that specific position for TP/SL will automatically adjust to 40 BTC.
Please note that setting TP/SL requires an open position; it cannot be established in the absence of such position.
VII. Important Note
1. Closing a position will affect the contract size of TP/SL orders. If a position is closed, the corresponding TP/SL order will be canceled.
2. The trigger price for forced liquidation may change due to user actions (such as reducing margin) or market fluctuations. Therefore, it's advisable to avoid setting the SL trigger price too close to the liquidation trigger price to prevent situations where liquidation occurs before the SL is triggered.
Risk Warning
In a highly volatile market, it's possible that TP/SL orders may not be executed or may only be partially executed. Please ensure you have a comprehensive understanding of how this feature works, remain vigilant about the associated risks, and exercise caution!
BingX holds no responsibility for any asset losses caused by market price fluctuations.
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