We have been quiet here in BTC and ETH the last 24 hours so I would like to slow down today and talk about RISK MANAGEMENT that does NOT include the use of derivative products. We have had a nice bounce from the lows last month and some traders are sitting on winning trades unsure of their exit strategy. Some may not yet be willing to cut profits short by closing these trades out (as we mentioned in yesterday’s Report, PATIENCE could be exercised to test the $4,400 BTC RESISTANCE level before selling any length). In this scenario, we would like to recommend the use of a STOP LOSS order.
A stop loss is an order that will TRIGGER a market order at the STOP Price given. If you are long BTC and want to wait and see if there will be a rally into the $4,400 RESISTANCE, but also want to lock in a profit if we sell off, you can enter: [Sell XXX BTC STOP $3950 MRKT] which would create a Market order to SELL if the market dropped below $3,950. There is slippage and liquidityrisk whenever a market order placed. These orders can lead to poor fills. A STOP-LIMIT order is another type of a stop loss order, where, as the STOP price is triggered, the order becomes a LIMIT order, and therefore will not be filled worse than the LIMIT price. For example: [Sell XXX BTC STOP $3950 LIMIT $3945] would TRIGGER at or below $3950 BTC and sell the quantity down to but not below a LIMIT of $3945.
Unfortunately, with these orders, you would need an electronic platform to enter and execute. The OTC Market Makers will not accept these orders nor advisecounter-parties on proper RISK MANAGEMENT for this strategy. As an Agency-broker, BitOoda CAN advise Clients to use all resources at their disposal to maximize profits and minimize risk.
That is why BitOoda is thrilled to have entered into a Strategic Partnership withTagomi. This electronic platform can accept and execute stop orders, stop-limit orders, as well as use Smart-Order routers and sophisticated algorithms from within its arsenal to execute across all the major exchanges as well as API liquidity providers to give YOU the best fills possible. Tagomi will increase competition, improve operational transparency, reduce fixed costs, and simplify the execution of Digital Assets trading for the entire Crypto-ecosystem.
If you have more questions about this Partnership, and want us to make an introduction to Tagomi’s onboarding team, we are happy do this for you. BitOoda is here to be a beacon of capital markets expertise, and promote technological innovation for YOUR benefit.
Founder and CEO
Executive VP of Institutional Sales
Dr. Ilya Kurland
Chief Derivatives Strategist