Trailing stop loss
A trailing stop loss is seen as a very effective risk management strategy that is used by a lot of traders when trading cryptocurrencies.
Trailing stop loss is a very popular feature that is available on some top crypto exchanges. Trailing stop loss is basically a dynamic stop loss that always follows the current market price to reduce profit loss.
Trailing stop loss is mainly used by traders in an uptrend and when the price of the particular cryptocurrency is continuously rising.
A trailing stop loss is a condition order that instructs the crypto exchange to set a dynamic stop loss that always follows the market price and only trigger a sell immediately when the price hits a pre-specified trailing stop-loss price.
This will trigger the crypto exchange to sell. It is mostly used after buying a particular cryptocurrency in an uptrend and the price continues to rise upwards.
Depending on the percentage distance used for the trailing stop loss, it would continue to follow behind the market price and would only trigger an exit when the price hit the trailing stop loss price and lower.
Margin call
In margin trading, sometimes trades and predictions don’t always go as expected and the market would go against the trader.
A margin call is not pleasant because it means that the trader is already in a losing position.
A margin happens to traders whose margin balance is in a critical condition and has decreased below the margin requirements as a result of loss from margin trading.
When the margin call happens, the trader would be required to deposit more funds or assets into their account.
They trader must deposit more funds or assets into the account or have their positions liquidates to make up for the margin requirements.