Mastering Crypto Trading, The Importance of Take Profits and Stop Losses
An introduction to Take Profit and Stop-Loss — two of the most important risk management tools available in Cryptohopper.
What is Take Profit?
Take Profit is a predefined price level at which your bot automatically closes a position to lock in gains. Rather than monitoring markets constantly, you set a target profit percentage and the bot handles the exit for you.
Example: You buy ETH at $2,000 and set a Take Profit of 5%. Your bot automatically sells when ETH reaches $2,100 — locking in a $100 profit per ETH.
Trailing Take Profit (Trailing Stop-Loss)
Standard Take Profit locks in gains at a fixed level. Trailing Stop-Loss goes a step further — it moves upward as the price rises and only triggers a sell when the price drops by a set percentage from its peak. This allows you to capture more profit during strong upward moves.
Example: ETH rises from $2,000 to $2,500. With a 5% Trailing Stop-Loss armed at 1%, the bot starts trailing at $2,020. If ETH then drops to $2,375 (5% below the peak), the bot sells — securing a larger gain than a fixed 5% Take Profit would have.
What is Stop-Loss?
Stop-Loss is a predefined price level at which your bot automatically closes a losing position to limit further losses. It is one of the most important risk management tools in trading.
Example: You buy ETH at $2,000 and set a Stop-Loss of 5%. If ETH drops to $1,900, your bot automatically sells — limiting your loss to $100 per ETH rather than allowing it to fall further.
Trailing Stop-Loss for loss protection
A standard Stop-Loss is set at a fixed level below your buy price. A Trailing Stop-Loss moves upward as the price rises, protecting gains while still limiting downside risk if the price reverses.
Dollar Cost Averaging (DCA)
DCA is an alternative approach to managing losing positions. Instead of selling at a loss, DCA buys more of the same currency at a lower price to reduce your average buy price — making it easier to recover.
Example: You buy ETH at $2,000. It drops to $1,800. With DCA enabled, your bot buys more ETH at $1,800. Your average buy price drops to $1,900. ETH only needs to rise to $1,900 — not $2,000 — for you to break even.
DCA increases your total exposure to the currency. If the price continues to fall, losses can grow. Use DCA carefully and always configure a maximum number of DCA retries to limit risk.
How to configure these settings in Cryptohopper
All three tools are configured in your Baseconfig:
- Take Profit and Trailing Stop-Loss — under Sell settings.
- Stop-Loss — under Stop-Loss settings.
- DCA — under Dollar Cost Averaging settings.
You can also configure these settings per currency group using Config Pools.
We recommend testing any new configuration on a Paper Trading bot before applying it to a live account.