How to Use Stop-Loss and Take-Profit Orders to Manage Risk
Learn how to place stop-loss and take-profit orders on Cointivo to automatically protect your downside and lock in gains — even while you sleep.
Why Every Trade Needs a Stop-Loss
Professional traders don't avoid losses — they control them. A stop-loss is a pre-set instruction to sell if the price falls to a level that means your trade thesis is wrong. Without one, a small loss can become a catastrophic one during a flash crash.
Types of Stop Orders on Cointivo
Stop-Market Order
When the price reaches your trigger price, a market sell order fires immediately. Guaranteed to exit — but in fast markets the fill price may be slightly worse than your trigger.
Stop-Limit Order
When the trigger fires, it places a limit order at your specified limit price. You control the worst price you'll accept, but if the market gaps through it, the order may not fill.
Setting a Stop-Loss: Step by Step
- After opening a buy position, go to Open Orders or place a new order.
- Select Stop-Market or Stop-Limit from the order type dropdown.
- Set the trigger (stop) price — the price at which the order activates.
- For Stop-Limit, also set the limit price (usually slightly below the trigger to ensure a fill).
- Enter the quantity and confirm.
Where to Place Your Stop-Loss
Your stop should sit below a key technical level so that it only triggers if the market structure truly breaks:
- Below a recent swing low
- Below a major support level
- Below a key moving average (e.g. 200 EMA)
Avoid placing stops at obvious round numbers — other traders do too, and the market often sweeps those levels before reversing.
Take-Profit Orders
A take-profit automatically closes your position at a target price, locking in gains. Place a limit sell above the current price. You can set multiple take-profit levels and partially sell at each one — this is called scaling out.
Risk-to-Reward Ratio
Before entering any trade, calculate your risk-to-reward (R:R) ratio:
R:R = (Target Price - Entry Price) / (Entry Price - Stop Price)
Aim for a minimum 1:2 R:R — risk $1 to potentially make $2. Over many trades, a strategy that wins only 40% of the time can still be profitable with a 1:2+ R:R ratio.
Common Mistakes
- Moving your stop-loss further away when the price approaches it — this defeats the purpose.
- Placing stops too tight — normal market noise will trigger it before your thesis plays out.
- Forgetting to set a stop at all — this is the most dangerous mistake of all.