Smart Orders: Trailing Take Profit

Introduction

The Trailing Take Profit (TTP) allows for maximisation of profits by automatically adjusting the take profit price as the market price moves in your favour.

A TTP can be added to the last Take Profit order in a Smart Order or Signal Bot order using the Custom TP option

Contents

Detailed background and Use Case
Settings
Signal Bot Settings
Trailing Distance
Editing a TTP
Execution
Tips and Tricks

Detailed background and Use Case

The Take Profit price acts as a trigger price. Once the price reaches this level instead of filling, the TP will begin to trail. Like the TSL:FP, the trigger price can only move in one direction: for a long position it can only move up. For a short position, it can only move down.



A Trailing Take Profit order is always pending (the funds are not reserved) up until the price reverses and the Stop price is hit. Therefore the TP price handle on the chart is a deeper red (or green) than the standard TP price flags for open orders. In My Orders, the order is also shown as Pending.
Distance is always positive and the distance price will always be below the TTP price for a long position, or above the TTP price for a short position.
The Distance price is also shown on the chart by a price handle.
TTP can only be used for the final TP of a Smart Order.

TTP is only available for TP Ladder Type: Targets (not for scaled ladders). It is possible to use the Scaled ladder option to set up the TPs, then swap to Targets: the order amounts and prices will be remembered, and a TTP can be added.

Settings

In the top part of the Trading widget, create the order entry.
In the Take Profit/Stop loss section, turn on the Take Profit option.
Choose Targets
Choose Fixed Price (targets won’t move if the average entry price changes) or Entry Price % (TP targets are relative to the average entry price).
Add more TPs if needed.
Position the TPs where you want them
Tick the TTP option
Set the TTP distance either by dragging the price handle for the Distance, or entering a percentage value. The Distance percentage determines where the Stop Price for the TTP is placed and how far behind the TTP it will trail.
When TTP is ticked, a Distance must be entered. This must be a positive value and will be the distance between the trigger price (TTP price) and the TTP Stop Price.



For example, if the TTP price is 100 and the Distance is 1%, the initial Stop price for the TTP would be 99.

The formula is:
Stop Price = TTP price * (1 - Distance)

For the example above: 99 = 100 * (1 - 0.01)

The Distance will remain constant when the TTP trails. The Stop Price will trail the TTP at the specified Distance percentage.

Signal Bot Settings

Currently, TTP can only be added to a Custom TP in the Signal bot.

What Trailing Distance to use?

When choosing the trailing distance for the Trailing Take Profit feature, consider your trading goals, risk tolerance, and the current market conditions. Here are some factors to keep in mind:
Volatility: Higher levels of volatility in the market may require a larger trailing distance to maximise profits, whereas lower volatility may require a smaller trailing amount.
Trading style: Traders with a more aggressive trading style may prefer a larger trailing distance to capture larger price movements, while traders with a more conservative approach may prefer a smaller trailing distance to minimize risk.
Timeframe: The timeframe of the trade can also impact the trailing amount. Longer-term trades may benefit from a larger trailing amount, while shorter-term trades may require a smaller trailing amount.
Market trends: It's important to consider the direction of the market trend and adjust the trailing distance accordingly. If the market is trending strongly, a larger trailing distance may be appropriate to capture larger price movements. If the market is more range-bound, a smaller trailing distance may be more appropriate.
Risk tolerance: Users should consider their risk tolerance when choosing the trailing amount. A larger trailing distance may result in larger profits, but also increases the risk of losses. Users should only choose a trailing distance that they are comfortable with and that aligns with their risk management strategy.
The amount allocated to the last TP. If you only have one TP with a TTP, then you will need to carefully consider the Distance value since the entire PnL for the position will depend on this. If you have more than one TP, and especially of the proportion included in the TTP is small then you can afford to take more risk, given that most of the PnL will be locked in by the preceding TPs.
Overall, choosing the right trailing distance for the Trailing Take Profit feature involves a balance between maximising profits and managing risk. Carefully consider these factors and choose a trailing distance that aligns with your trading goals and risk management strategy

Editing a TTP

A TTP can be edited before trailing starts without any changes to functionality.
When a Smart order with TTP is edited after trailing has started, in the Trading widget, the TTP will be marked “Trailing TP is Active.



If a TTP is edited after trailing starts, trailing will immediately stop, even if the TP/TTP itself is not edited.

After the edit, the untriggered TTP will be in place, and would need to be triggered again for trailing to restart.
For trailing to start immediately after an edit, the TTP price must be moved to or below the current price.

If you wish to move the TTP price below the Average Entry price and you have used a Target Price type of Entry Price % (i.e. place the TPs a percentage amount from the AEP, and move them as the AEP moves), this will need to be changed to Fixed Price type. After this, the TP price can be moved anywhere, including below the AEP. And if the AEP changes later, the TTP price (and other TPs) will not be moved.

To move the TP or TTP below the AEP, change the Target Price type to Fixed Price

Execution

Once Trailing has been triggered:
TTP trigger line changes colour from Blue to Green (these colours can be changed in the Altrady Chart Settings).
In the chart, the Distance price handle moves at the set distance from the TTP trigger price. The Distance represents the Stop price for the TTP.
The TTP trigger price will continue to move up as the price increases.
Once the price retraces, if it reaches the Distance price, the TP order is placed as a Market Order* At this point, the funds are reserved.

Tips and Tricks

The TTP is only available for Ladder Target TPs (not Scaled Ladders).
Since the TTP order is pending right up until the price retraces and the Stop order (distance) is reached, the funds are not reserved and will be shown as available. Be sure not to sell these coins or lock them in another order.
If the funds are not available when the Stop price is hit and the market order is placed:
---You will see an error in your notifications Insufficient Balance or similar
---The position will close without that order being placed.
To trigger trailing, the price must be above the TTP price for long enough (usually 1 minute is long enough).
Editing a TTP that is trailing will cancel trailing. See above.

When combined with a Stop Loss (including a TSL exit), once the TTP is triggered, the Stop Loss is cancelled.

Updated on: 11/05/2023