Trigger Order
Note: Trigger order is the simplest strategy order, and trigger price is the condition.
What is a trigger order?
Trigger orders will only be triggered when pre-set conditions are met. Traders need to specify a trigger price as the condition to activate the order. Currently, the system uses the last transaction price as the trigger condition.
Note: Before the trigger order is triggered, there is no margin requirement. This means that a trader can successfully set any trigger order, but if the account does not have enough margin when the trigger is triggered, the order will fail.
Currently, we offer two types of trigger orders:
Ordinary trigger order: the trigger price triggers orders such as lower limit price, market price, IOC, etc., not associated with positions and not affected by positions
Stop-limit order: associated positions, only apply to a certain position, used for stop-limit liquidation of a certain position.
Advantages of trigger order
1. Opening orders do not take up the margin
When using the momentum strategy, there is no need to freeze the margin, and multiple orders can be placed in possible positions. If the margin is insufficient, subsequent orders cannot be successfully submitted after being triggered.
2. Does not occupy the liquidable quantity
When the stop-limit order is set, the number of positions that can be closed will not be frozen, so multiple stop-limit orders can be placed. When the position is closed, the untriggered ones will be automatically canceled.
Ordinary trigger order - trigger condition
Currently, only the last transaction price is supported for triggering.
| Order Time | Place an Order | Triggering Conditions |
|---|---|---|
Trigger Price > 100.01% Last Price | ✓ | Last Price >= Trigger Price |
Trigger Price < 99.99% Last Price | ✓ | Last Price <= Trigger Price |
The trigger price is within 0.1% of the last price | ✗ | - |
Ordinary trigger order scenario
Trigger orders are often used in the following scenarios:
Bullish: Enter the market after the breakout occurs, and set the trigger price above the resistance level. If the price breaks through the resistance level, buy to see the bullish.
Bearish: Enter the market after the breakout occurs, and set the trigger price below the support line if the price breaks below the resistance level, sell to see the bearish.
Stop profit: Leave the market at the target level, set the trigger price at the target take-profit level, and if the price reaches the take-profit level, close the position and take profit.
Stop loss: Leave the market at the target level, set the trigger price at the target stop-loss position, and if the price reaches the stop loss position, close the position and stop loss.
Examples
Bullish scenario: In November 2020, the BTC price at this time was $19,500. A cryptocurrency player A predicts that if BTC breaks through 20,000 US dollars, it will accelerate its rise and reach 50,000 US dollars; if it fails to break through 20,000 US dollars, it will not rise sharply in the short term and needs to wait. Based on this prediction, A needs to place an order of "If the BTC price reaches 20,000 US dollars, buy 1 BTC more, otherwise, don't buy”. Neither the limit order nor the market order can meet this demand because A does not know whether BTC can reach 20,000 US dollars, and when it will reach 20,000 US dollars, so he cannot buy BTC at the right time. So A places a trigger order with the following parameters:
The execution logic of this trigger order: A trigger order is like a robot that monitors whether the market price reaches the trigger price at all times. When the market price reaches the trigger price, the robot immediately submits a "buy 1BTC" market order according to the parameters.
Same for bearish scenarios.
In addition to opening positions, we can also use trigger orders to close positions. This is the usage scenario of stop profit and stop loss.
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