Stop-loss and take-profit are the most important risk management tools in futures trading and must be set on every trade. After registering on Binance, you can use the stop-loss feature in futures trading. Download the Binance APP for convenient position management anytime.
What Are Stop-Loss and Take-Profit
- Stop-loss: A preset price that automatically closes your position when losses reach that level, preventing further losses
- Take-profit: A preset price that automatically closes your position when profits reach that level, locking in gains
How to Set Them
Setting at Order Entry
When placing an order, find the "TP/SL" (Take-Profit/Stop-Loss) option in the order panel and enter the target prices to set them simultaneously with your order.
Setting After Opening a Position
If you already have an open position:
- Go to the futures position list
- Find your position and tap "TP/SL"
- Enter the stop-loss and take-profit prices
- Confirm the settings
How to Determine Stop-Loss Price
- A common method is setting the stop-loss within 2%-5% of entry price
- Setting based on support and resistance levels is more effective
- The stop-loss amount should not exceed 2%-5% of total account capital
Why Stop-Loss Is Essential
The consequence of not setting a stop-loss is potentially losing all your margin (liquidation). Markets going against your position is a normal occurrence -- cutting losses promptly to preserve capital allows you to keep trading. Good traders don't fear small losses; they fear large ones.