> For the complete documentation index, see [llms.txt](https://docs.fulcrom.finance/fulcrom-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.fulcrom.finance/fulcrom-finance/other-features/take-profit-and-stop-loss-orders.md).
# Take Profit & Stop Loss Orders
Introducing our latest feature - **Take Profit and Stop Loss Orders** :tada:
This new feature allows users to automatically close their position when predefined profit or loss thresholds are reached, so you can lock in gains and mitigate losses from open positions.
## What are Take Profit and Stop Loss Orders?
**Take Profit** orders are orders placed to automatically close a position and realize profits when the market price reaches a predefined price level:
* Long Position: higher than entry price
* Short Position: lower than entry price
**Stop Loss** orders are orders placed to automatically close a position and minimize losses when the market price reaches a predefined price level:
* Long Position: lower than entry price
* Short Position: higher than entry price
✅ **Benefits**: It allows (1) better risk management and (2) flexibility to set specific buying/selling prices.
❌ **Limitation**: This can limit your profitability if the price moves in your favor.
## How should I set the Take Profit and Stop Loss Orders?
| Direction | Take Profit Order | Stop Loss Order |
| ------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Long Positions** | Set it at a price level ***above*** the **entry price** where you wish to close the trade and take profit |
Set it at a price level
below the entry price where you wish to close the trade and avoid further losses, and
above the liquidation price to prevent liquidation instead of just closing position
|
| **Short Positions** | Set it at a price level ***below*** the **entry price** where you wish to close the trade and take profit |
Set it at a price level
above the entry price where you wish to close the trade and avoid further losses, and
below the liquidation price to prevent liquidation instead of just closing position
|
## When will the Take Profit and Stop Loss Orders be triggered?
**Take Profit (TP)**
| Scenario | Triggering Condition (Long Positions) | Triggering Condition (Short Positions) |
| --------------------- | ------------------------------------------------------ | ---------------------------------------------------- |
| TP Price < Mark Price | N/A | Take Profit is triggered where Mark Price = TP Price |
| TP Price > Mark Price | Take Profit is triggered where Market Price = TP Price | N/A |
**Stop Loss (SL)**
| Scenario | Triggering Condition (Long Positions) | Triggering Condition (Short Positions) |
| --------------------- | -------------------------------------------------- | -------------------------------------------------- |
| SL Price < Mark Price | Stop Loss is triggered where Mark Price = SL Price | N/A |
| SL Price > Mark Price | N/A | Stop Loss is triggered where Mark Price = SL Price |
## What is Stop-Market Order?
**Stop-Market Order** is a stop order that is set to buy or sell a cryptocurrency at the market price once it has hit a specified stop price.
**Example**: You own 1 BTC, and you want to sell it only if the price drops to $45,000 or you want to buy BTC above $70000 as you predict it will break above .
✅ **Benefits**:
* Helps protect profits and limit losses
* Can be used for both buying and selling
* Provides a layer of automation to your trading strategy
❌ **Limitations**:
* Not guaranteed to execute if the stop price is not reached
* Vulnerable to slippage, similar to market orders
## When will Stop-Market Order be triggered?
| Scenario | Triggering Condition (Long Positions) | Triggering Condition (Short Positions) |
| ----------------------- | ------------------------------------------------------------ | ------------------------------------------------------------ |
| Stop Price < Mark Price | Placed as Market Order | Stop-Market Order is triggered where Mark Price = Stop Price |
| Stop Price > Mark Price | Stop-Market Order is triggered where Mark Price = Stop Price | Placed as Market Order |
{% hint style="info" %}
Stop-Limit Order is coming soon. Stay tuned! :loudspeaker:
{% endhint %}