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Let's say I bought 100 shares of company XYZ at 10$ a share. I think that the market price will rise to 12$, so I would like to sell ALL MY SHARES at 12$ (that's the limit sell order).

On the other hand, I'd like to protect myself in case things don't go as I expected (and let's also imagine that I am not able to constantly monitor the market). I would like to sell ALL MY SHARES at 8$, in case the price fell to that level (and that would be the stop sell, or stop loss order).

How can I do this? If I place a sell order at 12$, my shares end up reserved in the order book and I am not able to set the stop loss at 8$.

I used stocks as an example, but I am actually asking this for cryptocurrency trading (but I guess it is the same).

Are there trading platforms which supports what I would like to do, or is it impossible?

  • Ability to put orders are different by different stock exchanges. Most exchanges have now offer quite a few variations. In Cryptocurrency things could be different.There may or may not be such an option provided by the exchange. – Dheer Nov 27 '17 at 12:46
  • "Buy your stocks like you buy your groceries, not like you buy parfume" - Benjamin Graham – Lucas Raphael Pianegonda Jan 31 at 7:16
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I would recommend buying put options over stop loss (although what I would recommend even higher than either is not investing money you're not willing to lose in the first place), especially with cryptocurrency. A stop loss relies on the market being liquid enough to find a counterparty. In a panic, the price is going to plummet and by the time you find a buyer, you're likely to get far less than your stop loss price, and can easily lose more than if you had just ridden the panic out. With a put option, you have a counterparty locked in, and your strike price is fixed. And if you think a stop loss is a good idea, then probably a lot of other people are going to as well, which means that you'll all be bidding against each other, driving the price down even more. If enough people do this, a slight decrease in price can set off a crash.

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Yes, as far as the market is concerned, you can submit a limit order to sell at a good price and stop-loss to sell the same asset at a bad price. I have done things like this in a professional context with no problem.

The only limitation you might have is whether the broker you are using permits this behavior. It kind of looks like yours does not. You can search for a different broker or look into a contingent action of some kind. That is, you can specify that if either of these trades executes, the other should be immediately canceled. You may have to submit them together in order to keep your broker's computer happy.

All this stuff comes down to what your broker permits so you should consider contacting your broker to find out how to do this.

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This is sometimes called a bracket order and can be done for stocks. It is offered by some brokers, but not all. It does take slightly more sophisticated infrastructure for the broker to support, so not all of them might bother, especially in crypto.

As a note, if brackets are not supported but you have access to options, a vertical spread should provide very similar outcome to a bracket. Though, to truly benefit from the vertical spread, you would likely need to place a bracket order on the spread anyway.

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