Stop Loss in crypto copy trading
Crypto assets are volatile virtual products with a high risk of losing money quickly. No matter how well the trading performance of the trader there can’t be excluded the loss trades.
If you copy the trader and they make the losing trades, you might lose the money as well.
To save your funds and prevent the loss of your deposit on the exchange account, Coinmatics has a Premium feature called Stop Loss.
It works a little differently from the Stop Loss on the exchanges. So let’s have a closer look at Stop Loss on Coinmatics.
How Stop Loss works on Coinmatics?
Coinmatics doesn’t have a smart terminal (Beta version should appear soon) that allows trading on the platform. The trading occurs on the integrated exchanges (Binance, Bybit or OKX). This means that all of your funds will be on the exchange wallet.
The moment you connect your exchange account via API key (see in the video: https://www.youtube.com/watch?v=ktBPROLc5nQ) the tracking of the balance changes starts.
Setting the value for Stop Loss means that if your lifetime profit (calculated by the TWR model) of the connected exchange balance decreases to the specific amount, the platform will suspend your subscription to copy trading and convert all the assets on your account to the selected coin.
This way you stop copying the trader’s deals and if the shit coins were bought, you will get rid of it and the value of your wallet won’t decrease even more because of the coin price.
The common value to set up is around 70–75% as drawdowns and uprises are typical in trading. However, do check the trader’s performance on the strategy page to see if they are able to average the profit or be in black.
To summarize, if you decide to start following the Spot strategy on Coinmatics, please make sure you set the Spot Loss value or test it on the Premium trial.
How to set it up and the short information you can also read in the Coinmatics Help Center: https://support.coinmatics.com/en/articles/7021319-stop-loss-feature-on-coinmatics.
