How To Set Stop Loss And Take Profit On TradingView – A Step-By-Step Guide
Using stop loss and take profit orders are essential risk management techniques for traders using the TradingView platform. But how exactly do you set these orders to protect your capital and lock in profits?
In this comprehensive guide, I’ll explain what stop loss and take profit are, the benefits of using them, and provide a step-by-step walkthrough for setting these orders on TradingView’s charts and executing the trades.
Whether you trade stocks, forex, crypto, or any other asset, this guide will teach you how to effectively use stop loss and take profit and become a more disciplined trader using the TradingView platform. Let’s get started!
What Are Stop Loss and Take Profit Orders?
A stop loss order is designed to limit potential losses on a trade by automatically closing the position if the price moves against you by a specified amount. It’s a defensive tactic to prevent catastrophic losses.
For example, if you buy a stock at $50 and set a stop loss at $47, the position will automatically sell if the price drops below $47 to lock in a smaller 7% loss rather than risking a larger drawdown.
A take profit order does the opposite – it closes a winning trade at a predefined target price to lock in a profit. If you buy at $50 and set a take profit at $55, your position will automatically sell if the price rallies above $55 so you don’t miss booking those profits.
Using stop loss and take profit together is an effective risk management approach. The stop loss protects your downside, while take profit enables capturing upside.
Why Use Stop Loss and Take Profit On TradingView?
Here are some key benefits of using stop loss and take profit orders on TradingView and in general:
- Preserves capital by limiting losses on losing trades
- Locks in gains by closing winners at a defined target
- Creates objectivity by taking emotions out of exit decisions
- Allows setting exits before entering the trade
- Opens ability to automate strategy rules for backtesting
- Helps quantify and define risk-reward ratios
Overall, using stop loss and take profit creates discipline and structure for both your risk management and profit taking.
How To Place Stop Loss and Take Profit Orders on TradingView
TradingView makes setting stop loss and take profit orders easy and flexible using either their charts or order entry forms. I’ll walk through both methods.
Setting Stop Loss and Take Profit on Chart
- Open the symbol chart you want to trade and enable the Orders Panel if not already visible.
- Select the Order Type – in this case we’ll use a Buy Limit order. Enter Quantity and Price.
- In the Orders Panel, click Add Stop Loss. Enter the price where you want stop loss triggered.
- Below stop loss, click Add Take Profit. Enter the price where you want profits taken.
- Click Submit to place the limit order along with stop loss and take profit.
This attaches the protective stop loss and profit taking take profit orders to your entry order. The positions will execute according to your parameters.
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Using Order Entry Form
The flexible Trade panel can also set orders, stop loss and take profit:
- Open the Trade panel, select Account, Symbol, Order type (Buy Limit, Market etc).
- Enter Quantity and Price as desired.
- Under Advanced Options, define the Stop Loss price where position will sell to limit loss.
- In Advanced Options, define Take Profit price where position will close to lock in profits.
- Click Submit Trade to place the full order with stop loss and take profit.
The Trade panel consolidates order entry and trade management in one configurable form.
Tips for Effective Use of Stop Loss and Take Profit
When incorporating stop loss and take profit into your TradingView trades, keep these tips in mind:
- Set stop loss percentages based on your risk tolerance and volatility. Wider for volatile assets, tighter for stable.
- Use technical levels like support/resistance to set logical stop loss and take profit targets.
- Adjust orders if the trade goes in your favor. Move stop loss up to lock in profits.
- Don’t exit a winner too early by leaving take profit too tight. Give trades room to maximize profits.
- Backtest strategies with stop loss and take profit to optimize parameters.
- Use TradingView alerts to notify you if a stop loss or take profit is triggered so you can take quick follow-up action.
Disciplined use of stop loss and take profit orders will transform your trading results and experience on TradingView.
Common Questions About Stop Loss and Take Profit on TradingView
Here are answers to some frequently asked questions:
Can I attach stop loss/take profit after entering a position?
Yes! You can modify open orders at any time to add, update or remove stop loss and take profit levels.
Where can I view my active stop loss and take profit orders?
The Orders Panel shows all open stop loss and take profit orders for your account.
Can I set trailing stops that automatically update?
Yes, TradingView has trailing stop loss orders that dynamically update to lock in profits.
What order types support stop loss and take profit?
All basic order types – Market, Limit, Stop Limit etc. support attaching stop loss and take profit orders.
Can I have multiple take profit levels for one position?
Absolutely! You can define multiple take profit targets using the Advanced Order feature.
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The Power of Disciplined Trading
Trading with defined exits via stop loss and take profit is a game changer for managing risk and creating structure. By pre-determining your loss limits and profit goals, you eliminate emotional decisions during the heat of the trade.
I highly recommend mastering the use of stop loss and take profit orders within TradingView. They are powerful risk management tools that can transform your trading results and experience for the better.
To recap, here are key points covered in this guide:
- What stop loss and take profit are and their core benefits
- Walkthrough of setting these orders in TradingView chart and orders forms
- Tips for effective use based on trading style and asset volatility
- Answers to commonly asked questions
I hope you found this guide helpful! Let me know if you have any other questions about using stop loss or take profit orders on TradingView.