Stop Timeout Configuration:

Main Menu > Bot Configurations > Trading > client name > Stop-loss > Stop Timeout

*This configuration will apply both for auto-trades and manual trades.

The Stop Loss Timeout feature allows you to define a timeout period by which to delay the closing of a trade by a stop-loss order, in case you suspect the price will change again in the desired direction shortly, and you don't want to close (sell) your position immediately when reaching the stop-loss price.

How does it work?

When the price drops to or below the stop-loss level you set, the system will wait for the amount of time you defined, and when the time is out if the price is above the stop-loss price (as illustrated in the figure below), the stop-loss order won’t be executed and the trade will remain open.

Stop_Loss_Timeout_-_Positive_Scenario.PNG

If the price is still at or below the stop-loss price when the timeout passes (as illustrated in the figure below), the stop-loss order will be executed and the trade will be closed.

Stop_Loss_Timeout_-_Negative_Scenario.PNG

The stop-loss order execution decision will be taken only when the time out passes. Therefore, we should not expect to see the stop-loss order on the exchange before the timeout passes.

Please note that when the stop-loss order is executed after the timeout, it will be a market order and therefore will be executed immediately as timeout passes.

Why should you use it?

Prices can drop suddenly and immediately go up again. To ensure that your trade will not be closed if the price falls below the stop price only for a very short period of time and immediately increases again You may want to use a Stop Loss Timeout. You should take into consideration that using the stop-loss timeout feature might make your loss bigger in cases where the price keeps dropping during the timeout period.

How to determine the length of the timeout?

Experienced traders who are familiar with the markets and with specific pairs, can sometimes recognize patterns and behaviors and can determine the length of timeout in accordance. For example, if you recognize in a specific pair that when the price goes down it usually recovers in up to 5 minutes, in this case, the timeout period will be around 5 minutes.

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