How to Set Stop Loss in Futures Trading

1. Definition

2. Stop Loss Methods

2.1 Fixed Amount Stop-Loss

2.2 Percentage Stop-Loss

2.3 Technical Indicator Stop-Loss

2.4 Progressive Stop-Loss

3. User Guide (MEXC Website)

3.1 Flash Close

3.2 [Close Long] / [Close Short]

3.3 [One-Click Close]

[Reminder]

3.4 [Limit Order]

• Since closing long/short positions with [limit orders] can only be completed at the last price or at a price better than the last price (i.e., in a profitable scenario);

• Therefore, after opening a position, using a [limit order] to close positions cannot achieve the purpose of stop-loss.

• As shown in the diagram below: when opening a long position in BTC/USDT, setting a stop-loss with a [limit order] ([order price] at 65000 USDT) cannot be executed below the last price (average execution price at 66972.7 USDT).

3.5 [Trigger Order]

• You can precisely set the [trigger price], [price], and [quantity] (adjustable ratio);

• [Limit orders] for closing long/short positions can be executed at the last price or at a price better than the last price (i.e., in a profitable scenario), or at a price worse than the latest price (i.e., in a loss scenario);

• As shown in the diagram below: when opening a long position in BTC/USDT, using a [trigger order] allows you to set both long and short [closing positions]; therefore, when the [average execution price] is less than the [average opening price], the order can also be triggered to achieve the predetermined [stop-loss].

3.6 [Trailing Stop Order]

• [Trailing orders] allow precise settings for [Trail Variance] ([ratio] or [price distance]) and [quantity] (adjustable ratio);

• [Trailing stop orders] for [close long]/[close short] positions can only be completed at a price worse than the last price (i.e., in a loss scenario);

• As shown in the diagram below: when opening a short BTC/USDT position, after using a [trailing stop order], existing positions are completed at a price around 10% worse than the last price (64924.7 USDT).

3.7 Post Only

• [Post Only] orders are similar to [Limit Orders] for closing long/short positions: they can only be completed at the last price or at a price better than the last price (i.e., in a profitable scenario);

• Therefore, after opening a position, closing it with a [Post Only] order cannot achieve the purpose of stop-loss;

• As shown in the diagram below: when opening a long position in BTC/USDT, setting stop-loss with a [Post Only] order ([order price] at 65000 USDT) results in the order being canceled.

3.8 [Take Profit] / [Stop Loss]

4. Summary