1. What is Take Profit/Stop Loss (TP/SL)?

As a popular strategy for futures trading, TP/SL facilitates user to trade in the following ways.
1. TP allows users to reduce their position at a preset price to cash in their unrealized PnL.
2. SL allows users to reduce their positions and prevent their portfolio from suffering more losses to manage their risks.
With the TP/SL function, users are able to preset a TP/SL price and a TP/SL amount. Once the TP/SL price is reached by the market price, the system will close their positions according to the preset TP/SL amount.

2. When should I use TP/SL?

Generally, when users hold positions but find it difficult to track market trends for an extended period, they can utilize TP/SL orders. You're advised to implement SL on all positions to avoid the risks associated with forced liquidation.

3. How to set TP/SL?

Operational Guidance:
You can simultaneously set both TP and SL orders when opening a position in Perpetual Futures.

Set the order price and the trigger price.
1) Set Trigger Price. This is the preset condition to trigger your TP/SL order. You can choose between "Last Price," "Mark Price," or "Index Price" to meet the condition and trigger TP/SL.
2) Set Order Price: After the trigger, the order gets placed at this price in the market.

TP/SL Cases:
Case 1. Take Profit or Stop Loss for Close Long
User A opens a long contract for BTC at a price of $20,000 and wants to stop loss (SL) and exit the position at $16,000 if the market falls. Then he can set SL based on the following parameters:
Trigger Price: 16,000
Order Price: 15,950 (Note: while selling, it's recommended to set the order price below the trigger price for immediate execution, or opt for market price as the order price).
If the market price drops to 16,000, it will trigger an SL order to close the position at 15,950. (When choosing the market price as the order price, the system will immediately close the position at the best market price.)
For TP, User A should preset a TP order with an order price above 20,000.

Case 2. Take Profit or Stop Loss for Close Short
User A opens a short contract for BTC at a price of $20,000 and wants to stop loss (SL) and exit the position at $22,000 if the market rises. Then he can set SL based on the following parameters:
Trigger Price: 22,000
Order Price: 22,050 (Note: while buying, it's recommended to set the order price above the trigger price for immediate execution, or opt for market price as the order price).
If the market price rises to 22,000, it will trigger an SL order to close the position at 22,050. (When choosing the market price as the order price, the system will immediately close the position at the best market price.)
For TP, User A should preset a TP order with an order price below 20,000.

Case 3. Take Profit and Stop Loss for Long Positions
User A opens a long position for BTC at $20,000 and wants to close it for profit at $22,000 and stop loss at $18,000, he can set the TP/SL based on the following parameters below:
TP Trigger Price: 22,000
TP Order Price: 21,950 (any price that's below the trigger price, or use the market price as the order price)
SL Trigger Price: 18,000
SL Order Price: 17,950 (set any price below the trigger price, or use the market price)
If the market price increases to 22,000, the TP will be triggered to close the position at 21,950 (the position will be immediately closed if the market price is set as the order price), while the SL will thereby become invalid. If the market price falls to 18,000, the SL will be triggered to close the position at 17,950 (the position will be immediately closed if the market price is set as the order price) while the TP setting will thereby become invalid.

Case 4. Take Profit and Stop Loss for Short Positions
User A opens a short position for BTC at $20,000 and wants to close it for profit when the market price falls to $18,000 and stop loss at a market price of $22,000. Then, he can set the TP and SL based on the following parameters:
TP Trigger Price: 18,000
TP Order Price: 18,050 (set any price that's above the trigger price, or select market price)
SL Trigger Price: 22,000
SL Order Price: 22,050 (set any price that's above the trigger price, or select market price)
If the market price falls to 18,000, the TP will be triggered to close the position at $18,050 (the position will be immediately closed if the market price is set as the order price), while the SL will thereby become invalid. If the market price increases to 22,000, the SL will be triggered to close the position at $22,050 (the position will be immediately closed if the market price is set as the order price) while the TP setting will thereby become invalid.
 

4. FAQ

2. Why was my TP/SL market order executed with a slippage?
When using a market order, users don't need to preset an order price. Instead, it is executed instantly at the best price in the order book to ensure an immediate execution. However, the market order cannot guarantee that it can be filled at a certain price, especially in the case of a larger order which may be matched with various orders in the order book at different prices, potentially causing Slippage.
To avoid slippage, it's recommended to enable the "Guaranteed SL" feature when setting SL to ensure that your SL order is executed at your expected price.

Note: To mitigate trading risks, a protection mechanism is implemented to restrict the price range for filling market orders to within a certain percentage of the market price. If the execution price deviates more than the percentage required, the system will cancel the corresponding order.

3. Why didn't my TP/SL limit order execute when the market price reached the trigger price?
TP/SL limit orders are automatically placed at the preset order price when the TP/SL is triggered, that is, when the market price hits the trigger price. These limit orders will not be filled until there is a matching order in the order book that has a price equal to or better than the set order price.
The order may be executed partially or fail to be executed, especially in a highly volatile market when price movements lead to the market price rapidly surpassing the preset price. You're advised to assess the risks involved first before deciding if you continue to wait for execution or cancel the order.

4. Other Considerations
a. Closing positions affect the unexecuted TP/SL amount. If the position is entirely closed, the system will cancel the TP/SL order.
b. The SL price should not be set too approximate to the forced liquidation price as the liquidation price may change due to users' operations like reducing position margin or market volatilities. Otherwise, the forced liquidation will be triggered before the SL.

5. TP/SL can be used for closing positions only?
Yes. TP/SL orders are set to close positions only.

6. Do TP/SL orders only work for the current position?
Yes, TP/SL orders can work only for the current position and setting TP/SL is not possible if you have no open positions. You can set the amount for TP/SL capped at the amount available for closing in your position.
For example, if your position amount is 50 BTC, the maximum TP/SL amount will be 50 BTC. If you close 10 BTC through any means, the maximum TP/SL amount in that position will automatically become 40 BTC.
Note that you cannot set TP/SL without a position.

Risk Warning
TP/SL orders may fail to execute or fully execute in cases of extreme market volatility. Please ensure that you comprehensively understand how TP/SL works, exercise caution and manage risks diligently.
The platform shall assume no responsibility for asset losses due to price fluctuations in the market.