There are at least two possible uses for the Smart Cover trade:
Like a traditional short, when you have a negative trade or hold a coin dropping in value, you can sell the coins and buy them back at a lower price. This allows you to purchase back more of the same token. When the token recovers in value, the profit will be realized in your balance.
You can also repurchase coins after a profitable sale. Say you have a long trade in the positive but think that there would be a short-time price bounce and drop. Set an order to sell the tokens near the bounce point, then plan a repurchase to occur later.
There may be other great ways to use the Smart Cover; it is all up to you!
A Smart Cover trade has a Sell Condition and one or multiple Buy Conditions.
The Sell Condition is active from the creation of trade.
The Buy Conditions start their work after the sell order executes. You can plan when & how to repurchase coins using the Take Profit and Stop Loss sections.
A Take Profit describes when you want to buy coins with a profit, lower than sold.
A Stop Loss describes when you wish to repurchase coins in a loss, higher than sold.
The Smart Cover can be found on the SmartTrade page
Smart Cover: Short trade example
Imagine that John bought ETH for $250, but the price starts dropping and is now at $245.
After additional analysis, John's opinion changes, and believes that the price should drop near $220, and only after that is there an opportunity for it to recover.
So John places a Smart Cover trade to sell ETH at $245, but also, to repurchase it at $220.
If it doesn't reach $220, there is a Stop Loss to buy the coins back at $250.
John's Smart Cover currently has the following conditions:
Sell ETH at $245;
Repurchase ETH at $220 (Take Profit Condition)
If it executes, John has his ETH back and some profit from buying it lower.
Stop Loss is set at $250 just in case the price rises without reaching the $220 level.
John set a sell condition by placing a limit order to sell ETH at $245:
Here is their Take Profit, buy ETH at the market rate when the price reaches $220:
And finally, their Stop Loss. Buy ETH at the market rate when the price reaches $250.
Smart Cover: take profit and repurchase lower
For our next example, imagine that John bought ETH for $200 and wants to sell it at $250. He believes that after ETH hits $250, the price will drop to $230, then hopefully reverse.
John doesn't want to miss both opportunities, so he set a Cover Trade.
He sets the Sell Condition to $250 and the Take Profit to $230.
There is an option to set a Stop Loss near the $255-$260 levels for the case if the price continues the rise, but John doesn't want to take the risk of buying at the top, so he doesn't enable a Stop Loss.
So the resulting trade is:
Sell ETH at $250 using a limit order.
Repurchase coins at a lower price ($230) using the Take Profit market order.
Here is the Sell Condition, place a limit order to sell ETH at $250.
Here is the Take Profit, buy ETH at the market rate when the price reaches $230.
There is no Stop Loss for this trade.
Trailing features in Smart Cover trade
All our trailing features from Smart Trade are available in the Smart Cover section.
The following info should help with any confusion you may face:
In the Smart Cover section, where you plan a sell condition, there is a Trailing sell slider. Despite the name, it uses the same algorithm as Trailing Take Profit.
In short, it will try to sell coins as high as possible.
In the Take Profit section, there is a Trailing Take Profit slider.
The Take Profit in a Smart Cover describes when you will purchase lower for profit, not sell.
This means trailing works the same way as Trailing Buy.
Finally, the trailing option in the Stop Loss section works about the same way as
Trailing Stop Loss, but it will trail down.
When the price reaches a new low, it moves lower, and so on.