Trailing Take Profit
A tool that allows an order to follow the best price and automatically close a position when it pulls back by a set amount. Such orders are provided by many exchanges and offer flexibility in fixing profits. When working with trailing take profits, it is important to understand three key concepts:
For example, consider specific parameters: Activation Price: 3% from the entry point; Number of orders: 1 (the bot does not allow using more than one order when working with trailing TP); Retracement: 1%.
When the activation price is reached, the order is enabled, and the trigger price comes into play, which is calculated as the difference between the asset's best price and the retracement amount. Accordingly, if the best price rises, the trigger price will also rise following it.
For example, with the given settings, when opening a position at 100 USDT, the order is activated upon reaching a price of 103 USDT, after which a trigger price of 102 USDT will be calculated. If the price continues to go up, the trigger price moves up along with it.
If the price reverses and goes in the opposite direction, in this case it reaches the trigger price, where a market or limit stop order is automatically placed (the bot uses a market order). A market order will trigger in any case, while a limit order might not be "caught" if the coin's movements are too volatile.
What does the retracement amount affect? The larger the retracement, the greater the deviation from the best price when the trigger price is reached, thereby reducing our profit. On the other hand, we give the order more room for a repeated upward reversal and, accordingly, an increase in profit.
Open Interest
A parameter used in derivatives trading (futures and options) to measure the total volume of open long and short contracts that have not yet been closed, exercised, or expired. It is needed for:
- Market activity analysis: Helps evaluate how actively market participants are trading a given instrument.
- Trend identification: An increase in open interest can indicate that the current trend is gaining strength, while its decrease may indicate a weakening of the trend.
- Liquidity assessment: High open interest indicates high liquidity, which makes it easier to enter and exit positions without significant price fluctuations.
Entry Point - entry point, position opening point, at this level the PNL for the position will be 0.
PNL (P&L, PnL) - profit and loss. Total profit or loss. In the context of cryptocurrency, this often refers to the current income or loss on a position.
