What is Stop Loss Timeout?
Simply put, when the Stop Loss Timeout is enabled, the system will delay closing a trade by Stop Loss should price fall to or below the Stop Loss price you configured.
Why would I want to use this?
You may have noticed that when trading some charts that you experience "wicks" or "fake-outs" where the price drops suddenly but comes back up quickly, sometimes this is due to poor liquidity or low trading volume, other times this may be a liquidity or Stop Loss "hunt". Either way, if you experience these issues, you may want to use a Stop Loss Timeout to ensure your trade is only closed if price falls below your traditional Stop Loss setting and doesn't recover within a few minutes.
The more frequently you trade specific coin pairs, you'll have noticed any patterns or behaviour that is specific to the pair, such as sudden price drops and then price goes on to recover within 5-15 minutes, for example.
How does it work?
If the price drops to or below the Stop Loss level you set, the system will wait for the amount of minutes you specified and perform the following actions:
- If the price is at or below the Stop Loss level set, the position will be closed by Stop Loss;
- If the price rose back above Stop Loss level, the trade will remain open and the counter will reset.