Huobi Futures Adds Trailing Stop to Support Users With Professional Financial Instruments
Today, Huobi Futures, a global leading digital asset derivatives trading platform under the Huobi umbrella, announced that it will be officially supporting the “Trailing Stop” features for both Huobi’s websites and API portals.
This move represents an initiative to further incorporate and welcome professional traders into the cryptocurrency space. By adding the Trailing Stop function to its trading platform, Huobi Futures will allow users to place a preset order when a large callback occurs; a useful tool in the volatile crypto space.
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Trailing Stop Orders
A Trailing Stop Order allows users to place a preset order when larger callbacks occur. This can always be used for buying when the market rebounds from the bottom or selling when the market falls back from a high point.
If the market price of a contract meets the activation price and the callback rate set by a user, the strategy will be triggered to place a limit order by using the preset price (optimal N or formula price).
A trader could decide the activation price and callback rates to trigger whenever the price rebounds.
For example, a futures trader foresees the BTC/USDT swaps to drop below $10,000 USDT and the prices could rebound somewhere below $9,000 USDT, so he or she can set a callback rate of 2% and an activation price of $9,000 USDT, meaning it can automatically start buying when the price rebounds 2%.
Because of this, if, in the above scenario, the price drops to $8,800 (lower than the activation price) and rebounds to $8,976 (a 2% rebound), the system will help the trader automatically create a buy order of 100 contracts, thus ensuring that profit margin.
According to Ciara Sun, Vice President of Huobi Global Markets, the addition of this tool to Huobi Futures can also be seen as “educational,” giving users more exposure to the underlying functions of exchange-based trading.
“In my opinion, a trailing stop is not only a simple financial instrument but also more of an educational tool. This tool is something that can help trading and strengthen retail investors into more professional users,” stated Ciara Sun.