The most horrible feeling for crypto investor is waking up someday to see your assets tanking in value right before your eyes. Many newbees will experience this and watch their thousands of dollars evaporate overnight but couldn't do anything about it. And in crypto it is a fact.
Another thing that is controversial is whether putting assets in an exchange is safe. We know the horror of MtGox where people lost their assets and some recent incidents too. But to put it in perspective nowadays measures have been set up to minimize these attacks and loss of funds.
From my point of view although hardware wallets can be the safest place for your asset. However it has one thing that we cannot put on it. Set up an automatic Stop loss . Or the ability to automatically sell the asset when going down in value say 80% of your original price.
What we usually do is take quick action to put it back from our hardware wallet to an exchange then sell it although in loss. Usually the damage is already 30% and sometimes 40% the first down turn. If we are slow it will go more further down and your asset can be as worst as being only 20% the original value. This is exactly what happen this May to June significant drop just like the February drop.
"Its going down.its going down.It will go up again .Concensus was just a week ago....no its going down. and down again.. Sh** I'm rekt. My alts are worthless..."
Unless you are a long term hodler and dont care much about the price shrink of asset, you will leave it in your wallet.
Meanwhile on the other hand some traders that are dicipline in setting up stop losses are smiling when prices go down. I say some because there are also many careless traders.
To avoid the big loss and prevent your asset from tanking here it is imparitive for us to setup a stop loss.
Here is how we do it on Binance App. Binance is considered to be one of the safest exchange. it has 2FA and many security layers to protect your asset.
To put a stop loss is first you go to your asset for example you have BNB coins and you wanna put stoploss against a stable coin (a coin that usually has a value of 1 USD for example USDT)
After that you go to 'SELL' section and there will be 3 dropdown menus. The holy grail is the third one : " STOP - LIMIT".
Long ago before the update there is only 2 menus and we cant put stoploss unless you login to the desktop version.
After you select "STOP-LIMIT" Then the screen shows like below with 3 important input boxes.
If we see above :
The first one is to put a certain level of price where this 'rule' will start working. If we are putting stop loss there is a certain level we want to put for example current price is hovering around $ 10.7. So we put 10.6 as the starting level for this to activate.
The second input box is what actual price do we sell. Here is the real execution of selling at a certain point which in this example is $ 10.5.
The third box is the amount of asset we would want to sell. In the Binance App it is convinient to put numbers or percentages. In this case 100% which is 16 BNB.
Then the final confirmation message box will ask you again as shown below :
Then if you click 'YES' then the rule will execute.
A sudden drop of price will be detected by this Sell rule and save your asset from massive lost.
Hope you can save your asset from massive decline of value. The best strategy is put some long term asset in hardware wallet but put some (30% or how much you are comfortable) in an exchange with a stoploss set to it. And you wont be waking up someday and get rekt anymore.
If you havent join Binance . Use the link below :
https://www.binance.com/?ref=13550736
Coins mentioned in post: