What is Take-Profit (TP) and Stop-Loss (SL)
In futures trading, Take-Profit (TP) and Stop-Loss (SL) allow traders to preset trigger prices either before or after opening a position. When the market price reaches the preset trigger price, the system will close the position to lock in profits or stop losses, effectively mitigating trading risks.
Types of Trigger Prices for TP and SL
When setting TP and SL in CoinEx futures trading, you can choose from the following two types of trigger prices:
1. Latest Price/Latest Execution Price
(1) Definition: The price of the most recent transaction displayed in the futures trading order book.
(2) Pro: The trigger price for TP/SL will be closer to the latest market price.
(3) Con: Forced liquidations are triggered based on the mark price, not the latest price. This may result in situations where the mark price triggers liquidation before the latest price reaches the trigger price for SL.
(4) When to use: If you want the TP/SL trigger price to closely match the actual market price, you can choose “Latest Price” for your TP orders.
2. Index Price
(1) Definition: The weighted average price is calculated based on the Spot market prices of major exchanges.
(2) Advantages: Allows the TP/SL trigger price to closely match the Spot market price.
(3) Disadvantages: The price difference between the Spot market and the Futures market may cause discrepancies between the actual execution price and the expected price.
(4) When to use: If you prefer a TP/SL trigger price closely aligned with the Spot market price, you can choose the Index Price as the trigger price.
3. Mark Price (Recommended for newbies)
(1) Definition: The mark price is calculated using the Index Price and Moving Average Premium Index. CoinEx uses Mark Price to determine whether forced liquidation occurs, effectively protecting users from unnecessary liquidation in the event of abnormal price swings caused by market manipulation or insufficient liquidity.
(2) Pro: Setting the mark price as the SL trigger price reduces the risk of forced liquidation due to abnormal market volatility.
(3) Con: Due to the difference between the mark price and the latest price, there could be a deviation between the actual execution price and the expected price.
(4) When to use: If you want to reduce the risk of forced liquidation during abnormal market fluctuations, you can choose “Mark Price” for your SL orders.
🔗 Explore More: What is Mark Price >>
TP/SL Rules
1. The default trigger price for TP/SL is “Mark Price”, but you can select “Latest Price” in your consideration.
2. If you hold no position in a certain futures market, you can only submit ONE TP/SL order. If multiple TP/SL orders are submitted, only the FIRST one will be valid, while subsequent orders will become invalid due to changes in position.
Example: If you submit two orders in a certain futures market where you do not hold any position - Order 1 without TP/SL settings and Order 2 with TP/SL settings - when Order 1 is executed first, the system will determine that you already have a position. The TP/SL settings in Order 2 will become invalid because the TP/SL settings for opening a position cannot apply to an existing position.
3. If you already have a position in a certain futures market, you can only modify the TP/SL settings for the existing position.
4. TP/SL is triggered only ONCE. Partial position closures are considered ONE successful trigger, and the original TP/SL settings will no longer apply to the remaining position. You will have to set TP/SL again for the remaining position.
5. If both TP and SL are set for a certain futures position when one of them is triggered and the position is not fully closed, the other will be canceled automatically.
Example: If you hold 10 BTCUSD contracts and set both TP and SL for the position, when TP is triggered with only 5 contracts closed, the original SL setting will be automatically canceled and will no longer apply to the remaining 5 contracts.
6. TP/SL trigger prices cannot be directly modified. To make changes, cancel the original setting and reset.
7. Trigger Price Restrictions for TP/SL
The TP/SL trigger price must meet the following conditions based on the direction of the position.
| Position Type | Trigger | TP/SL | Remark |
| Long Positions | Trigger Price > Latest Price | TP | If the trigger price is set with an incorrect direction, the TP/SL order will not be executed. |
| Liquidation Price ≤ Trigger price ≤ Latest Price | SL | ||
| Short Positions | Trigger Price < Latest Price | TP | |
| Latest Price ≤ Trigger Price ≤ Liquidation Price | SL |
Note: When the market price reaches the preset price, the system will submit a market order to close the position according to the Auction-Style Liquidation Strategy.
However, if the TP trigger price is too high (long) or too low (short), the market price may never hit the preset price, and thus the order will not be executed.
8. Effective Price Restrictions for TP/SL
If the difference between the reference price and the current price falls within a certain range, and the trigger price is set within this range, the TP/SL settings will become invalid.
| Order Type | Reference Price | Trigger Price |
Current Price Used for Determining TP/SL Validity |
|
Limit order
|
Limit order price | The type and value of TP/SL price set by users | The current price at the time when the new position is opened, which is associated with TP/SL |
| Market order | Latest price at order submission | ||
| Stop order | Trigger price of the stop order |
How to Set TP/SL
1. For opening a new position
- Web: CoinEx Navigation Bar > Futures Trading > Above “Buy/Long” or “Sell/Short” buttons > Check the "TP/SL" box > Set “Mark Price” or “Latest Price”
- App: Open the CoinEx App > Futures > Above “Buy/Long” or “Sell/Short” buttons > Check the "TP/SL" box > Set “Mark Price” or “Latest Price”
2. For existing positions
- Web: CoinEx Navigation Bar > Futures Trading > Current positions > Check the "TP/SL" box > Set “Mark Price” or “Latest Price”
- App: Open the CoinEx App > Futures > Current positions > Check the "TP/SL" box > Set “Mark Price” or “Latest Price”
Scenarios Where TP/SL Orders are Canceled
1. Due to High Volatility
(1) TP/SL triggers only once. If the strategy is executed in response to rapid market fluctuations with the position partially unclosed, the original TP/SL will no longer apply to the remaining positions, and you will need to reset the TP/SL settings.
(2) For one single order, TP and SL will not be executed at the same time. When one of them is triggered and the position is not fully closed, the other will be canceled automatically. The original TP/SL settings will no longer apply to the remaining positions.
2. Due to Forced Liquidation or Auto-Deleveraging (ADL)
The system will execute the Auction-Style Liquidation Strategy after TP/SL is triggered. During the execution, if forced liquidation or ADL occurs due to market volatility, the system will cancel TP/SL and prioritize forced liquidation or ADL.
🔗 Explore More: Introduction to Auction-Style Liquidation Strategy >>
Additional Note
To reduce the risk of TP/SL failure, it is recommended to set trigger prices reasonably and monitor market risks and conditions. If TP/SL settings become invalid, please reset or manage your positions immediately.