BogTools — Trailing Stop-losses for DeFi Traders

In a market as volatile and unpredictable as the DeFi space, it was never really a question of if sophisticated trading tools like charts, stop losses, limit orders etc would be available, but when and by whom?

The answer, in the BSC space at least is Bogged.Finance. Boasting an already impressive suite of tools that rival those offered by centralized exchanges (CEX) like Binance, it doesn’t look like the Bog team is content to rest on their laurels. On the 23rd of June, it unveiled its latest trading tool — Trailing Stop Losses.


What’s a stop loss?

For those unfamiliar with what a stop loss is, it’s best described as a failsafe that a trader sets upon entering a trade. Should the price of a token fall below a certain threshold, the stop loss kicks in and immediately sells the token without the need for a trader to be present.

This effectively “locks” in a maximum amount that a trader is willing to lose, giving you peace of mind when you go to bed at night that your portfolio can grow infinitely should the price of a token appreciate, but only lose a predetermined amount should the market swing the other way.

Trailing Stop-losses

trailing stop-loss is the more advanced version of a stop loss. Similar to a stop loss, a trader would pre-determine a certain amount of risk he is willing to accept. However, should the price of the token appreciate, this stop loss wouldn’t remain static and would instead “trail” behind the price, ready to sell your tokens should the price fall below the new high.

Let’s look at an example.

Trader A, B and C all decide to invest $1000 to buy $EXAMPLECOIN at a price of $1.

Trader A doesn’t use a stop loss or a trailing stop loss.

Trader B sets up a stop loss for 20% below the entry price of $1.

Trader C sets up a trailing stop loss for 20% below the price of the token.

While all three of them were asleep, $EXAMPLECOIN moons 10x to $10 but then quickly gets rugged, dropping the price from $10 to $0.1. What happened to our three traders?

Trader A’s just lost most of his investment, leaving him with a 90% loss of $900.

Trader B’s stop loss kicked in when the price hit $0.8 (20% below the entry price of $1), leaving him with a 20% loss of $200

Trader C on the other hand, wakes up and sees a 800% profit of $8000

How did Trader C make a profit? When the price of $EXAMPLECOIN shot up to $10, his stop loss continued to follow behind it, eventually settling at $8 (20% below the current price). After being rugged, the trailing stop loss kicked in at $8, selling all of Trader C’s tokens for a total of $8000.

This sounds amazing! What’s the catch?

Trailing stop-loss on Bogged.Finance

There is none! If you’re trading in the crypto markets, you really should be using a trailing stop loss to limit your risks. There is of course, a requirement and cost associated with using the service.

It costs $5 in BOG per trailing stop-loss.

You’ll have to be holding a minimum of 5k $BOG, worth $4500 at the time of writing. While this does seem like a large upfront investment requirement, it’s made much more accessible due the staking multipliers that the BOG team have offered.

$BOG Multipliers — Your $BOG total is multiplied by 3 for each BOG you have staked in the Compensation Pool and a factor of 12 for each BOG-BNB LP token that you own.

This means that pre-exploit holders would only need approximately 1667 BOG ($1500.3) to qualify for the trailing stop-loss feature, while BOG-BNB liquidity providers will need some $14k in BOG-BNB LP tokens.

Closing Thoughts

It is both heartwarming and reassuring to see the BOG team consistently pushing out new features and updates. As a writer in the crypto space, I see new projects with innovative ideas launched every single day, only to die off when met with the harsh realities and challenges of the cryptoverse.

Yet despite the downturn in the market, despite being the victim of a flash loan attack, BOG has taken it all in stride. It’s relaunched the new BOG token, pacified and reassured investors, released a FREE price bot for anyone to use on Telegram channels, all while continuing to develop and innovate.

Do I think the trailing loss function is an excellent addition that will be popular in the market? Yes. But the real reason why I see a bright future for BOG is because I’m convinced of the quality and dedication of the team behind BOG.

Good luck BOG team, I’m rooting for ya.

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Note: The views expressed are my own and should not in any way be taken as financial advice.

Source : bsctimes

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