How take profit & stop loss work

One of the most practical tools available in perps trading is the ability to set automatic close conditions on your positions. Rather than needing to watch price charts constantly, you can define the exact conditions under which your trade closes, whether things go well or not.

Stop loss

A stop loss is an instruction to automatically close your position if the price moves against you to a certain level. It puts a floor on how much you can lose from a single trade.

Example: You open a long on Bitcoin at $60,000 and set a stop loss at $57,000. If Bitcoin drops to $57,000, the position closes automatically. You've limited your loss without having to act manually.

Take profit

A take profit works the same way, but on the upside. It closes your position automatically when the price hits your profit target.

Example: You open a long on Bitcoin at $60,000 and set a take profit at $66,000. When Bitcoin reaches $66,000, the trade closes and your profit is locked in, even if you're not watching.

Why use them?

Markets don't wait for you to be available. Prices move at all hours, and a trade that looked fine when you opened it can turn quickly. Setting stop loss and take profit levels when you open a position is good trading discipline, it takes emotion out of the equation and ensures you're not caught off guard.

You can set these conditions when you first open a trade, or update them any time from your position details.

Risks to consider
Perps are high-risk instruments, leverage can amplify losses as quickly as gains, and positions may be liquidated rapidly in volatile markets. Funding rates and market dislocations can also impact returns over time. Always ensure you fully understand the product and only trade with funds you can afford to lose.