In this article, we explain what Trailing Stop-Short is and how it works.

What is Trailing Stop-Short?#

Before we explain what Trailing Stop-Short is you need to know the difference between Shorting on Cryptohopper and traditional shorting. Our Shorting is like a buyback function. When you expect the price of a position to go down you initiate a Short. These funds will be reserved to buy back the same amount of the currency for less. Now Trailing Stop-Short comes in. With Trailing Stop-Short you will track how much the position is going down and how much “loss” you’ve saved! When you expect that you’ve reached the bottom, you stop the Short. Your bot will buy back the position, protecting you from a loss.

How does Trailing Stop-Short work?#

See how Trailing Stop-Short works in practice: You have a position, but you think the price is about to drop. You open a Short for that position (reserving these funds). The price of the currency goes down and your Trailing Stop-Short is automatically adjusted downwards. As the price continues to drop, your Trailing Stop-Short has adjusted again. When the price starts to go up based on your Trailing Stop-Short percentage, the Trailing Stop-Short is triggered, buying the currency with the reserved funds.