Bogged Finance brings a highly sophisticated trading tool to the DeFi Landscape in Trailing Stop-Losses.
Stop-Loss vs Bogged Finance’s Trailing-Stop Losses
Bogged Finance has unveiled a powerful trading tool that lets investors capitalize on trades in volatile markets. The new feature was launched on June 23rd, and looks to transform how typical crypto trading functions by bringing the typical stop-loss function to DeFi on BSC. A typical stop-loss works by a trader/investor setting a sell price at X% of their purchase price, to hedge against loss. Then, the trading platform executes automatically when the price sinks, hitting the trader’s chosen %.
How Stop-Loss Works
Example of typical stop-loss: Trader Bob buys bitcoin for $32,000, but enables a standard stop loss order at 10%. If the price of bitcoin goes down $3,200, which is 10% of $32,000, Bob’s stop-loss is immediately executed, selling his shares of bitcoin at $29,800 at a 10% loss. A stop-loss is to protect investors from massive price drops.
Bogged Finance’s trailing stop-loss functions similarly to a typical stop-loss function, however, Bogged Finance’s trailing stop-loss function is contingent on the trailed price of the coin/token in question, not the original purchase price.
Bogged Finance’s Trailing Stop Loss Explained (With Pictures)
Perhaps the best way to understand how their new feature works is best illustrated with the following example:
Let’s hypothetically imagine that there are three crypto traders investing in the market: Trader A, Trader B and Trader C.
All three hypothetical traders above buy Dogecoin, for example, at around $.10 a coin.
Trader A believes Dogecoin will hit a dollar, and so puts no contingency plan in place.
Trader B believes Dogecoin will also hit a dollar, but seeing the volatility in the market, puts a stop-loss order for 25% at $.10 a coin original purchase price, just in case.
Trader C has analyzed the crypto market, and plans to take advantage of the volatility. Although he too believes Dogecoin will hit a dollar, Trader C uses Bogged Finance’s trailing stop-loss order function and sets a trailing stop-loss to trail 25% behind the price of the coin.
All three traders go to bed to get some much needed sleep. Overnight, Dogecoin goes up 200%, then crashes down in the morning, stabilizing at around $.05, around 50% the original purchase price made by our three traders.
Trader A has now lost 50% of his investment
Trader B, thanks to his stop-loss, has only lost 25% of his investment
Trader C, thanks to Bogged Finance’s trailing stop-loss, has made a colossal profit of 175%!
How was Trader C able to accomplish this? Bogged Finance’s trailing stop-loss had trailed the fluctuating price of Dogecoin, and when the coin dropped 25% from its readjusted all-time high price, the trailing stop-loss was executed. Thus, Trader C was able to capitalize on a 175% profit. See below for reference:
One can begin to understand how valuable a tool like trailing stop-loss function could be in a volatile market. With massive price fluctuations occurring randomly, having a tool that helps investors capitalize on their earnings without having to be constantly present and personally monitoring the markets, is incredibly helpful with massive financial rewarding capabilities.
Can Novice Investors Use the Trailing Stop-Loss Function?
The answer is yes, they can. It’s very simple and straightforward to use Bogged Finance’s trailing stop-loss function. Although some may assume the feature is reserved for high-roller, experienced-investor types, Bogged Finance has made the process incredibly effortless and easy to use.
The only requirement to use the function is to have a holding of 5,000 $BOG, the Bogged Finance token. After that, the only fee is a $5 fee in $BOG to cover maintenance and execution of the trade. The trailing stop-loss function that Bogged Finance has brought into the crypto space is an ingenious and intuitive way to help investors maximize their profits through turbulent markets, while also providing the function to hedge against risk. It should be incredibly exciting to see where Bogged Finance situates themselves in the crypto space!
What is Bogged Finance
Bogged Finance is a powerful tool built for crypto investors exploring the Binance Smart Chain. The protocol comes packed with powerful tools, enabling traders and investors to see up-to-date data and analytics, as well their revolutionary trailing stop-loss function. The protocol looks to build out and offer tools of legitimate utility to traders, while providing them the best options to capture maximum capitalization from their investments.
Source : bsc.news
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