Take profit and stop loss exits
A crypto trading bot can only work with proper exits signals.
Let's see how we can automate them with Kaktana.
Basic stop loss
The goal of a stop-loss is to stop losing money (yay!)
We're going to decide that we don't want to lose more than X % of our trade.
Too many traders forget to use them, and lose a significant part of their capital whenever the prices dips a bit (which happens every week with cryptocurrencies)
Adding a stop loss sell condition
For a 2% stop loss, we want to sell when : [LAST TRADE's PRICE] < [BUY PRICE * 0.98]
To create the "LAST" value, click on :
- Type -> Price
- Price -> Last
And to create the "BUY PRICE * 0.98" value, click on :
- Type -> Price
- Price -> Buy price
- Operation -> *
- Constant -> 0.98
Your configuration should look like this:
Basic take profit
The goal of a take profit condition is to secure your profits.
We want to sell whenever we reach a certain target. In this case, we're going to set it up to 2%.
Adding a take profit sell condition
For a 2% take profit, we want to sell when : [BUY PRICE * 1.02] < [LAST TRADE's PRICE]
The steps involved to fill the 2 values are exactly the same as before
How it should look like in the end
Those conditions will trigger a sell order whenever our price drops more than 2% or gains more than 2%.
From now on, we can complexify our sell orders to make more precise and clever sell orders, like what we're doing in our RSI strategy or on our turtle strategy.