This article will explain the use scenarios, interface details, parameter meanings, order management methods, notes, and FAQs of take-profit and stop-loss functions.
1. Introduction to take-profit and stop-loss functions
Take-profit and stop-loss functions allow you to set price points. When the market price reaches these points, the system will automatically trigger buy or sell operations, helping you control risks and secure profits.
Take-profit order: Closes the position automatically when the stock price rises to your specified profit target, allowing you to lock in gains.
Stop-loss order: Closes the position automatically when the stock price falls to your specified loss limit, helping you limit losses.
2. Usage scenarios/Entry
Operate via the post-trade interface: After placing an order, set take-profit and stop-loss functions for your holdings via the post-trade interface.
Operate via the holdings interface:Apply take-profit and stop-loss settings directly to your current holdings via the holdings interface.
3. Interface overview
(1) Setting take-profit and stop-loss prices
Take-profit and stop-loss prices: As shown in the figure, the take-profit price is USD 229.89 and the stop-loss price is USD 188.09.
Expected profit and loss ratios: expected profit ratio (e.g., +10.00% in the figure) and expected loss ratio (e.g., -10.00% in the figure).
Expected profit amount:
Calculation formula: (Take-profit price – Cost price) × Quantity
Example: +USD 208.97 in the figure.
Expected loss amount:
Calculation formula: (Stop-loss price – Cost price) × Quantity
Example: –USD 209.03 in the figure.
Take-profit and stop-loss switches:
Enable both: Activate both take-profit and stop-loss prices. If one order is triggered, the other order will be automatically canceled.
Enable take-profit or stop-loss switch: Only place a take-profit order or stop-loss order.
(2) Configuring order parameters
Limit/Market: You can choose between market orders or limit orders. For limit orders, you need to specify the take-profit and stop-loss order prices.
Validity:You can select a validity period for take-profit and stop-loss orders, including Good ‘til Canceled, day, or custom.
Session:For the US stock market, you need to select the trading session. Note that market orders can be executed only during regular trading hours.
(3) Keyboard operations
TP (Trigger price)/SL (Trigger price): Set target prices as a percentage above/below your cost price.
Qty: Easily select the number of shares based on your current holdings.
TP (Order price)/SL (Order price): Set the order price based on the take-profit/stop-loss price.
4. Parameter description
TP: The price at which the position will be closed automatically when the market price reaches or exceeds this level. If only a take-profit price is set, your position will be closed to realize gains when the stock reaches this price.
SL: The price at which the position will be automatically closed when the market price falls to or below this level. If only a stop-loss price is set, your position will be closed to contain losses when the stock price moves unfavorably. If you set take-profit and stop-loss prices at the same time, triggering one price will invalidate the other.
Note: Setting take-profit and stop-loss prices at the same time means setting both a take-profit price and a stop-loss price. If one price is triggered, the other will be canceled automatically.
5. Examples
Example 1: Investor A holds 500 shares of XYZ with a cost price of USD 10.00.
A sets take-profit and stop-loss orders through the holdings interface. The take-profit price is USD 11, the stop-loss price is USD 9.5, the quantity is 100, and the order type is a market order. Once these orders are placed, the system will generate two monitoring orders. Stop-loss order: Sell 100 shares at market price if the price falls to or below USD 9.5. Take-profit order: Sell 100 shares at market price if the price rises to or above USD 11. If the market price reaches USD 11, the take-profit order is triggered, and the stop-loss order is automatically canceled.
Example 2: Investor B holds a short position of 100 shares of XYZ, opened at a cost price of USD 10.00.
B sets take-profit and stop-loss orders through the post-trade interface. The take-profit price is USD 9, the stop-loss price is USD 11, the quantity is 100, the order type is a limit order, the take-profit order price is USD 8.9, and the stop-loss order price is USD 11. Once these orders are submitted, the system generates two monitoring orders. Take-profit order: Buy 100 shares at a limit price of USD 8.9 if the price falls to or below USD 9. Stop-loss order: Buy 100 shares at a limit price of USD 11 if the price rises to or above USD 11. If the market price reaches USD 11, the stop-loss order is triggered, and the take-profit order is automatically canceled.
6. Take-profit and stop-loss order management
After submitting orders, you can view and manage your take-profit and stop-loss orders in the order list.
Long position: Take-profit/Stop-loss orders correspond to two sell orders.
Short position: Take-profit/Stop-loss orders correspond to two buy orders.
Notes
Take-profit/Stop-loss price: The system defaults to setting the price based on the cost price ±10%. However, if the cost price is 0 or negative, this default mechanism will not take effect.
Limit order: The take-profit/stop-loss order price should be set reasonably based on the liquidity of the underlying asset. Limit orders may not always be filled.
Quantity: Take-profit/Stop-loss orders are conditional orders and will not occupy the holdings quantity. If you manually close positions while orders are pending, part or all of your conditional orders may fail due to insufficient holdings.
Check the order's validity period and trading session settings to ensure that they align with your trading plan. Note that market orders are not supported during US stock pre-market or after hours.
FAQs
Q1: How can I modify existing take-profit and stop-loss orders?
You can find the corresponding take-profit or stop-loss order in the order list and click Amend to modify parameters.
Q2: Why was my take-profit/stop-loss order triggered before reaching the set price?
The market chart is a candlestick chart based on weighted averages, but conditional orders are triggered by real-time, tick-by-tick trade prices.
Key Takeaways
Function definition: Take-profit and stop-loss orders allow you to control risks and lock in profits by setting preset prices.
Usage methods: Operate via the post-trade or holdings interface, following on-screen prompts to configure parameters.
Order management: View and manage orders in the order list. The type of position (long or short) determines whether buy or sell orders are placed.
Notes: Pay attention to price-setting mechanisms, risks of limit orders, impact of holdings, validity periods, and trading sessions.
FAQs: Learn how to modify orders and understand why trigger events may differ from chart prices.
Disclosures
This article is for reference only and does not constitute any investment advice. Market conditions are complex and dynamic, and the actual effectiveness of take-profit and stop-loss functions may be influenced by various factors. When making investment decisions, carefully consider your circumstances and use the take-profit and stop-loss functions prudently.