A Complete Guide to Futures Take-Profit and Stop-Loss: 3 Tips to Help You Avoid Forced Liquidation

gaslight_gasfeez · 2025-11-21T18:08:28+00:00

In crypto futures, the market changes rapidly, and one careless move can lead to liquidation. Today, let's talk about the life-saving function of Take Profit/Stop Loss (TP/SL).What is Take Profit/Stop Loss?Simply put:- Take Profit: When the price reaches your set target, the system automatically closes the position to lock in profits.- Stop Loss: When the price falls below your set threshold, the system automatically stops the loss to avoid major losses.Gate’s TP/SL offers two methods:1. Preset When Opening a PositionSet your TP/SL conditions when placing an order. The system will automatically execute a market order when your chosen trigger price (latest price/mark price/index price) and condition (ROE/P&L/price) are met.2. Adjust During an Open PositionIf you've already opened a position, you can still add TP/SL. You can choose to close the entire position or partially take profit/stop loss. It also supports triggering by ROE, P&L, or price.Why must you use TP/SL?

gaslight_gasfeez

2025-11-21 18:08:28

In crypto futures, the market changes in an instant—one careless move can lead to liquidation. Today, let’s talk about the lifesaving feature: Take Profit/Stop Loss (TP/SL).

What is Take Profit/Stop Loss?

In simple terms:

Take Profit (TP): When the price rises to your set target, the system automatically closes your position to lock in profits.
Stop Loss (SL): When the price falls below your set threshold, the system automatically closes your position to cut losses and avoid heavy drawdowns.

On Gate, there are two ways to set up TP/SL:

1. Set in Advance When Opening a Position You can preset your take profit and stop loss conditions when placing your order. The system will execute a market order automatically when your chosen trigger price (latest price/mark price/index price) and condition (ROE/P&L/price) are met.

2. Adjust While Holding a Position If you’ve already opened a position, you can still add TP/SL. You can choose to close the entire position or partially take profit/stop loss. ROE, P&L, and price triggers are all supported.

Why You Must Use TP/SL

Just three words: Automated Trading.

No need to stare at the screen. This prevents greedy signals from turning into greedy liquidations, and you won’t panic-sell at the bottom. Set your trigger conditions, let the system execute for you, and your trading becomes more rational. In the long run, this can significantly improve your win rate and capital efficiency.

Three Practical Tips

① Don’t Set Stop Loss Too Loose It’s recommended that any single loss should not exceed 2-5% of your total account balance. Calculate your risk-reward ratio before entering a trade.

② Adjust Strategy According to Trend In an uptrend, you can take profit in layers; in a range-bound market, use tighter stop loss.

③ Combine with Technical Analysis Don’t set TP/SL purely based on gut feeling. Look for key support/resistance levels, moving averages, and candlestick patterns—these are the reliable reference points.

Pitfalls to Watch Out For

In extreme market conditions, TP/SL may slip or fail to trigger. This happens because the market is too volatile and your set price can be skipped in an instant. So you can’t rely solely on TP/SL—combine it with position sizing and risk management.

Conclusion: TP/SL is a standard tool in futures trading. It helps you lock in profits, prevent big losses, and control risk. But no tool is perfect—the key is to have a solid trading system and strong capital management awareness.

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