A Better, Marketwide Stop-Loss Order for Volatile Crypto Markets

At SFOX, we’re dedicated to equipping our traders with the best tools to give them an edge every time they trade in the crypto market. That’s why, today, we’re thrilled to announce the launch of a new-and-improved stop-loss trading algorithm to help you build better trading strategies in volatile market conditions.

Sign into your SFOX account now to try it out for yourself.

What is stop-loss?

Stop-loss is a type of sell order that only goes on the order book if and when the asset one is trading falls to a certain price. For instance, if one were to buy bitcoin at $10,000, one might place a stop-loss order at the price of $9,500 — that way, if the price of bitcoin falls to $9,500 and just keeps falling, one would theoretically only lose 5% of one’s investment.

Why did we redesign our stop-loss algorithm?

SFOX’s unique value proposition created an equally unique problem when it came to stop-loss orders. Our platform’s integrated order book allows users to trade across over 20 different crypto exchanges and liquidity providers at once, giving them access to best price execution, arbitrage opportunities, and more. However, this unparalleled access also means that the price of an asset like bitcoin might drop below a certain threshold on one exchange while remaining above that threshold on other exchanges.

For example, imagine again that one were to buy bitcoin at $10,000 and set a stop-loss order at $9,500. It’s possible that BTC could slip below $9,500 on a single exchange with especially poor liquidity while still remaining above $9,500 on all other exchanges — and, if that were to happen, it’s possible that one’s SFOX stop-loss order could trigger even though BTC’s price on most exchanges was still above the trigger’s value.

How is our new stop-loss algorithm better?

The new SFOX stop-loss algorithm takes the average price of all trades within the last minute, across all exchanges, and uses that average price to determine the trigger values for stop loss orders. Now, if the price of a cryptocurrency like bitcoin dips on just one exchange, the average price of the cryptocurrency will decrease, but that alone won’t be enough to trigger one’s stop-loss order. In other words, stop-losses now wait until there is a consensus among most major exchanges about the price drop before triggering.

Our redesign of stop-loss orders is just one example of how we’re constantly upgrading our trading algorithms to keep you equipped for whatever latest challenge the market throws at you. If you haven’t tried out our full suite of algorithms, now’s the perfect time: we’re offering 50% off our most advanced algorithms through the end of July.

Happy trading,

The above references an opinion and is for informational purposes only. It is not intended as and does not constitute investment advice, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any cryptocurrency, security, product, service or investment. Seek a duly licensed professional for investment advice. The information provided here or in any communication containing a link to this site is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject SFOX, Inc. or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by SFOX, Inc. or its affiliates to buy or sell any cryptocurrencies, securities, futures, options or other financial instruments or provide any investment advice or service.