Recently, I saw someone ask about take-profit and stop-loss, which reminded me that when I first started trading, I was also completely clueless. Today, I want to share my understanding with everyone.

Honestly, take-profit and stop-loss seem simple, but to really use them well, you need to master them to survive longer in the crypto world. I’ve personally suffered losses—despite making money, I was reluctant to sell, and as a result, I watched my profits evaporate and eventually lost my principal. At that time, I thought, it would have been great if I had set a take-profit.

In simple terms, take-profit is deciding at what price to lock in your gains, and stop-loss is to cut losses and exit to prevent further damage. I used to monitor the market and manually operate, but later I realized that using trigger prices for automatic execution is a great way to free yourself.

I remember buying a certain coin at 1,000 yuan, setting a take-profit at 1,200 yuan. What happened? The price rose to 1,150 and then started to pull back. I was still thinking whether it would continue to rise. Luckily, the system automatically sold at 1,200, or I would have been affected by my emotions again. Similar situations happen with stop-loss—sometimes I’d feel heartbroken losing 100 yuan, but if I hadn’t set a stop-loss price in advance, I would have kept losing money.

That’s why I now place great importance on setting take-profit and stop-loss. They are not just risk management tools but also help stabilize your trading mindset. Once set, you can fully rely on the system to execute, avoiding emotional reactions to price fluctuations. Over time, you can truly see whether your trading strategy is effective.

I also learned a concept called trailing stop-loss, which means not using a fixed price but setting a relative loss amount. For example, if a coin rises from 1,000 to 2,000, I set a trailing stop-loss of -200, so the stop-loss price will adjust to 1,800. If the price continues to rise later, the stop-loss will move up accordingly. This way, you can protect profits without being stuck by rigid numbers.

Most trading platforms now have built-in take-profit and stop-loss functions, available for both spot and futures trading. I personally prefer setting trigger prices, so when the market reaches that level, the system places an order. The advantage is that you don’t need to watch the market constantly and can avoid accidental triggers caused by sudden price swings.

At this point, I want to emphasize that the ratio of take-profit to stop-loss varies from person to person. Some look at support and resistance levels, others use moving averages, but I think the most practical method is asking yourself: How much profit would make you satisfied? How much loss would make you feel heartbroken? Setting according to these questions is the most suitable strategy for yourself.

Looking back now, I realize that my previous losses could have been avoided if I had properly implemented take-profit and stop-loss at the time. If you’re trading mainstream coins like ETH, BNB, or SOL, I highly recommend starting with demo trading to practice. Experience how take-profit and stop-loss work without any risk, so you can get started much faster.