Importance of Limit Orders and their Implementation on Perpetual Protocol
As an exchange that is based on futures trading, orders are important to a trader for profitability and benefits that comes with using Perpetual Protocol to trade. There are different types of orders such as market order, limit order, stop order etcetera. If you are a conservative trader, a limit order could be the best for the reasons discussed below.
Desired Purchasing Expectation
Love to control or be in power? That is what the implementation of limit orders does. You decide the price to pay. This helps you 'cut your coat according to your size. You end up executing a trade at the expected price you want. The market volatility doesn't bother you since you determine the price to buy. Against the price of an asset, you can determine the specific price to pay and when the asset meets your expectation, the trade is executed.
Security Against Volatility
Due to the volatile nature of the market, as a trader, you need to be glued to your device to know the best beneficial position to enter when trading. Implementing limit orders helps you to not only pay at your desired price but acts as an automated mechanism to secure your money from the volatile market. You do not need to keep monitoring the market when you implement limit orders as well as you hedge the risk that comes with trading.
Profitability in Price Improvement
Price improvement becomes the advantage of a trader who uses limited orders. If the price of an asset dips below the position a trader enters, the trade is executed while the trader gets more than bargained. The expectation of purchasing at your desired price is not only achieved, but you get more for the less you paid.
Minimizing loss
Every trader desires to profit and not lose, while it is impossible not to experience loss, it can be minimized. Limit orders ensure minimal loss by a trader's choice of price to pay for an order. In other words, your loss is controlled and put in check as you trade. This ensures that your profits are higher than your loss.
Summary
If you consider yourself a conservative trader, implementing limit orders as you trade could be the best option to help you get assets at desired prices, security against volatility, profit when price moves and minimize your loss on the Perpetual Protocol exchange.
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