All Collections
SmartTrading (SmartTrade & Trading Terminal)
Take Profit, Stop Loss and Terminal features explained
How Take Profit works (both Smart Trade and DCA bots). Trailing feature explained.
How Take Profit works (both Smart Trade and DCA bots). Trailing feature explained.

Learn more about how Take Profit (TP) and Trailing Take Profit (TTP) work. This information is relevant for both Smart Trades and DCA bots.

Updated over a week ago

The most common tool you see on 3Commas is the Take Profit tool.
This can be in the form of a token's value, the percentage gain of a token from the purchase price, or in the case of DCA Bots, by using a Deal Closing Condition.

The system will close the transaction when the price rises to (or above) the price you set for Long trades, and when the price drops to (or below) the price you set for Short trades. Or receives a signal from TradingView.

For example:

You buy 1 BTC for $34,000 and set a Take Profit of +10%, which would equal $37,400.

Next, you would need to adjust the rest of the Take Profit settings required:

  1. Choose the order type - Limit or Market. More info is in this article.

  2. Set the price of the Take Profit order. You can either manually input the price or the percentage of TP. To switch between these types, click on the price or % value. In our example, it's a price 37400.

  3. Set several Take Profit targets. More info about this feature is in this article.

  4. Turn on the Trailing Take Profit feature. More info is later in this article.

  5. Here you can see the approximate profit.

Later, BTC continues to trade at around $34,000 for a while and then begins to rise. Eventually, the price reaches $37400, and the system sells your BTC at this price as a Limit order (or at the market price if you choose Market Order).
You will realize a profit of $3400.

Take Profit ensures you do not miss a profitable moment at times when you're away from your computer and can’t closely watch your trades!

How Trailing Take Profit works.

Trailing Take Profit (or TTP), in short, is a feature designed to help you capture more profits from your trades.

When you set your Take Profit target on which the Trailing feature will activate and try to increase your profits as much as possible. This is great when the price continues moving past your original Take Profit target as the Trailing feature will follow the price by a percentage buffer (called the deviation) that you configure, when the price reverses by the Trailing deviation percentage you configure, the trade is closed.

The drawback is that you can also lose a part of the profit if the price reverses immediately after the trailing feature has been activated.

How is the Trailing Take Profit activated?

We receive a live stream of asset prices from the exchange. Whenever there is a change in price, the bot automatically checks if the price has exceeded the trailing take profit level configured in the bot settings. If it has, and the trailing is about to be enabled, the bot sends a request to the exchange to double-check the price to make sure it's not a false signal to trigger the trailing (like a fast candle "wick"). It can take as little as 50 ms or as long as a couple of seconds - it depends on the load of the API connection with the exchange. During this validation, the price could move back away from the trailing level, so the bot will deactivate the trailing and wait for the price to move past the activation point again.

If the signal appears to be valid, the bot will enable trailing take profit and keep monitoring the price until it falls back to the trailing deviation percentage that is also set in the bot settings. This ensures that profits are locked in, and the trader can maximize their gains.

Trailing Take Profit is not recommended for illiquid markets, especially if you are trading with large order sizes, as slippage can occur when closing the deal with a Market Order. If you are trading large sums with your bot or trading in illiquid markets, it is recommended to disable Trailing Take Profit, as the bot will then place a Limit Order when the take profit target is hit.

You should not use the trailing for all trades! Please, check where not to use the trailing:

  • The pair has a low daily trading volume (below 100 BTC, for example);

  • The pair has very low liquidity, and your trade could change the price a lot (for example if the average order size transacted for the asset you wish to trade is $100, then don't use trailing if you intend to create a trade that uses more than $100!);

  • The pair has too high a "spread" (this is the difference between the buy and sell prices in the order book);

  • You want to catch a big breakout (also known as "pump and dumps"), where one purchase may drive the price up to +10% and higher, but seconds later the price crashes back to its previous level;

  • You want to sell at an exact level, and not below your target;

Better to use limit orders in all these cases above.

Trailing Take Profit feature is available for all types of SmartTrades (and DCA bots).

Switch the toggle to green at the top right corner of the Take Profit section to enable Take Profit option.

Then switch the toggle to green right next to the Trailing Take Profit part to enable Trailing feature.
The feature has only one setting called "deviation" which you can change in the same part:

Let's check TP settings on the image above.

The overall target is +10% or 237.6 USDT. We have the trailing feature enabled there with -2% maximum deviation. What will the system do with these settings?

When the price reaches 237.6 USDT or +10%, it will activate the trailing.

From this point, it will follow the price until it starts dropping.

You would ask, but how can it determine when the price reverses and goes back down? That's where the deviation matters. The system will sell coins when the price drops from the latest high by the deviation percent configured.

Also, please note that Trailing Take profit will only be set for your last Take Profit step if you create more than one Take Profit target for your trade.

In our sample trade, the moment after the Trailing feature is activated, the system will set +8% as the trigger for selling the asset.

The highest price point at that moment is +10%, and the deviation is -2%, +10%-2%=+8%. All new price highs after Trailing is activated will calculate a new, higher, trigger price. The critical point to consider is that when the price drops, it will not lower the trigger price configured.

  • Price increases 4% higher to +14%, and the selling point rises by +4% too, now it is at +12%;

  • Price drops 1% back to +13%, and nothing happens;

  • Price increases all the way up to +20%, and the selling point following it up to +18%;

  • Price drops back to +15%, and the system closed the trade when the price crossed down +18% mark.

Take a look at this animated example to see Trailing Take Profit in action:

Advice for configuring the Trailing Deviation setting

The deviation percent is the most critical setting for TTP.

Treat is as how much profit you would be happy to lose if price reverse immediately after the feature is activated.

Within Cryptocurrency markets, the price can easily touch your TP level and go back down due the volatility of this asset class, which is why the deviation is how much your profit could be sacrificed.

When you set TTP +10% with deviation -2%, be ready on occasion to get only +8% profit.

Remember these four rules on how to calculate the deviation to be successful with the trailing feature:

  • The main rule here is to set it relative to the Take Profit target percent;

  • Don't set it to the same value as TP target as you would end with zero profit;

  • Don't set it to more than a quarter of your configured TP target;

  • Don't use trailing at all for coins with very low liquidity and high spread.

Here are some examples of good setting pairs:

  • TP +5%, deviation -1%;

  • TP +8%, deviation -1.5%;

  • TP +10%, deviation -2%;

  • TP +15%, deviation -3%;

And setting examples you should never use:

  • TP +5%, deviation -5%;

  • TP +5%, deviation -4%;

  • TP +10%, deviation -8%;

  • TP +15%, deviation -20%;

You may omit these rules when you feel that you know what you are doing and are ready to risk.

Did this answer your question?