Stop-limit orders: my little tip for surviving the chaos of cryptos

I discovered stop-limit orders after losing a shameful amount during a brutal market fall. I really wish I had understood this mechanism that combines a stop order and a limit order earlier - it would have saved me some sleepless nights!

Specifically, when I place a stop-limit order, I set two prices: first the stop price that triggers my order, and then the limit price at which I actually want to buy or sell. It's like having a little robot that monitors the market for me while I sleep or when I'm desperately trying not to stare at my screen all day.

Let's take a concrete example: I spotted a crypto at €300. I feel that it will rise, but I want confirmation of the trend. I then place a stop at €310 and a limit at €315. As soon as the price hits €310, my buy order at a maximum of €315 is triggered automatically. No more impulsive purchases at any price!

To sell, it's the same. If my crypto rises to €300 after buying it cheaper, I can set a stop at €289 and a limit at €285. If the market starts to fall, my sell order activates as soon as it reaches €289, and I sell at a minimum of €285.

However, be careful! These orders are not magical. In these chaotic markets, your order may never be executed if the price exceeds your stop or changes too quickly. I have seen crashes where my limit order was never reached - and I watched in horror as my position remained open while the price fell.

Honestly, platforms should better explain these tools. I had to learn the hard way, but now I no longer trade without my stop-limit orders. It's my safety net in this ocean of uncertainty that is the crypto market.