To set a stop-loss or take-profit, choose a trigger price and an order type that determines how the exchange tries to close your position. The trigger is not necessarily the price you receive: a market-based exit prioritizes execution but can fill at a different price, while a stop-limit submits a limit order that may not fill at all.
Order names, trigger references, and position controls vary by exchange and product. The steps below use Binance Spot as a concrete example; derivatives and other exchanges may work differently.
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Choose the exit behavior before entering prices
A stop-loss and a take-profit are conditional exits. The exchange watches a specified price condition and, when it is met, submits or activates an order. Decide first whether execution or price control matters more to you.
| Order approach | What happens at the trigger | Main trade-off |
|---|---|---|
| Market-based stop | The exchange submits a market order when the trigger condition is met. | It prioritizes getting out, but the fill price can differ from the trigger, particularly when the market moves quickly. Kraken describes this behavior in its stop-loss order guidance. |
| Stop-limit | The trigger submits a limit order at the specified limit price. | You set the least favorable acceptable price for the limit order, but the order can remain unfilled if the market moves past it. See Kraken’s stop-loss-limit guidance and Binance’s stop-limit explanation. |
These are not interchangeable guarantees. A trigger activates an order; it does not guarantee a particular execution price or, for a limit order, any execution.
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Set up a linked exit for a spot holding
Binance Spot OCO example
Binance Spot documents an OCO order as a pair: a limit order and a stop-limit order. OCO means “one cancels the other”: the exchange links the alternatives so one is canceled when the other executes or is activated, subject to Binance’s documented implementation. It is not a universal label for identical behavior on every venue.
- Open Binance’s Spot trading interface and select the OCO order type, following the exchange’s OCO instructions.
- For a sell-side exit on a spot holding, enter the take-profit limit price, the stop trigger price, the stop-loss limit price, and the amount. Binance’s example places the take-profit limit above the current price and the stop trigger below it; treat that direction as an illustration for a sell order, not a template for every position or product.
- Review the order details and submit. Check that the OCO appears under Open Orders; use Order History to review execution history.
The trigger price and stop-loss limit price serve different purposes: the trigger activates the stop-limit, and the limit price is where the resulting limit order is placed. If the market moves beyond that limit, the exit may not fill.
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Configure exits for a derivatives position
Do not copy the spot sell example mechanically. On derivatives, whether an exit is a buy or sell depends on whether you are closing a long or short position; favorable and adverse price directions are reversed between the two. Check that the selected side and trigger would reduce or close the position you intend.
Coinbase’s derivatives guidance allows take-profit, stop-loss, or both to be added to a new order or an existing position. When both are added, Coinbase links them as OCO. It describes these exits as reduce-only and notes the exchange may adjust, cancel, or reject them based on the remaining position and other open orders. Availability and exact controls depend on the product and region; see Coinbase’s derivatives TP/SL guidance.
Check these details before submitting
- Trigger reference: Confirm whether the order watches last traded, index, mark, or another reference price. The reference can differ from the chart price. Coinbase asks users to review the selected reference; Kraken documents index or last-traded price depending on availability.
- Quantity: Make sure the exit amount matches the position or holding you want to close. If you partially close or change the position, verify that the remaining exit orders still match your intent.
- Linkage and reduce-only behavior: Confirm whether the exits are OCO-linked and whether they are tied to the position. Kraken says its stop-loss is an independent order by default unless reduce-only is selected. An independent alternate exit may remain after another exit or a manual close, so review and cancel stale orders when needed.
- Other open orders: Check for existing exits or orders that could interact with the new order. Exchanges may adjust, reject, or cancel exits depending on remaining position size and other open orders.
- Order status: After submission, verify that the order is visible in Open Orders or the position’s TP/SL controls. Do not assume it is active merely because you clicked submit.
What these orders cannot guarantee
A stop-loss does not guarantee that your loss will be capped at the trigger price: a market-based stop may execute elsewhere, and a stop-limit may not execute. A take-profit likewise does not guarantee a profit if the order cannot fill at its limit or circumstances change. TP/SL orders also do not guarantee protection from liquidation. Coinbase states this explicitly in its derivatives guidance.
Exchange interfaces, available order types, trigger references, and regional access can change. Confirm the current order form and support documentation for the specific exchange, product, and jurisdiction before placing an order.
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