One thing about cyrptocurrency that alot of new investors will not be prepared for is that the market runs 24/7, 365. There is no time that a market is down. An exchange may have issues, but cryptocurrency is always trading. Because of this, prices are constantly fluctuating, both during the day while you’re up and at night while you’re asleep. If your goal is to hold your investments long term, weather all of the storms and cash out at a later date, then concerns about your coins highs and lows might not be a high priority. For those who are looking to swing or day trade and want to ensure they sell at certain positions in an attempt to buy back lower and strengthen their positions, then knowing the importance of a Stop Loss Order and Stop Loss Alert is for you.
A Stop Loss Order is essentially an order to the exchange to sell your coin when it reaches a certain price. So for example, you have a coin you bought at 200 satoshi’s(sats). It reaches 1200 sats and you want to make sure you sell if it ever dropped below 800 sats that you sell, you can put in an order on your exchange to sell some or all of your coin if it were to ever hit 800 sats on the market. This is a good way to prevent a loss when you are not able to keep an eye on the prices. The downside to this is that some type of variable like an untrue rumor, pump and dump groups or anything that should not legitimately cause a drop, could cause the price to temporarily drop below your Stop Loss Order, just briefly, before climbing back up to its position, or even worse, higher than when you sold. This could cause a loss of money as now you would have to pay more to get back what you already had.
A Stop Loss Alert is a notification telling you that a price has reached a certain level, one that you have logged to notify you when reaching. With a volatile market like cryptocurrency, a stop loss alert gives you a safer way of seeing what is happening to the price and then allowing you to make the determination of whether to sell or hold. An alert will not sell your order, only notify you. There are multiple apps that you can download that follow the market price in real time where you can set an alert to a price of a specific coin, that will notify you when it reaches it or drops below it. The only downside to this is that with a market that runs literally non stop, you have to be prepared for alerts to go off in the middle of the night, as prices can vary any time throughout the day.
A few apps you can download from your mobile app store that will create Stop Loss Alerts: