Crypto stop-loss bot: six questions to ask before you rely on one
Almost every crypto trading bot says it places a stop-loss. Fewer say what happens after that. The stop is an order sitting on the exchange, and orders on an exchange can be rejected, cancelled or left behind. A stop-loss bot is worth relying on only if it keeps checking.
Here are six questions to ask of any bot. The answers for Stralines are given as an example. This is educational only.
1. Does it confirm the stop is on the exchange?
Sending a stop order and having a stop order are different things. The exchange may reject it for the wrong price step, a size below the minimum, or a trigger too close to the market.
Stralines: each stop is checked right after it is placed.
2. What happens if the stop disappears later?
Exchanges cancel stops for their own reasons: a mode change, an expiry, a clean-up of old orders. A bot that looks once will not notice.
Stralines: a scan every two minutes looks at every open position and puts back a missing stop, and a further check catches stops that are removed later. The failure cases are described in Why your stop-loss disappears.
3. What if two bots hold the same coin?
On many futures accounts, two bots trading the same pair share one position on the exchange. A stop for one can close the other.
Ask how the bot keeps each trade’s stop and result separate. Stralines keeps a separate record for every signal, even when the exchange shows one combined position.
4. Does the stop follow partial exits?
If the bot takes part of the profit, the stop must shrink to the size that is left, and many rule sets then move it to the entry price. A stop left at the old size can open a new position in the other direction.
5. What does it do in a gap?
A stop-loss is an instruction to sell when a price is reached. In a fast move the fill can be worse than that price, and no bot changes this. The answer you want to hear is an honest one, with position size and leverage chosen so that a bad fill is survivable. See Position sizing and risk caps.
6. Can you see what it did?
When a trade ends badly you need the sequence: when the stop was placed, whether it was replaced, at what price it filled. A bot with no record leaves you guessing.
Stralines keeps the order history for every trade.
The short version
A stop-loss bot does not remove the risk of loss. It narrows the time a position spends without a stop, and it does the checking you would otherwise have to do by hand at three in the morning. Ask the six questions, and try the answers on a practice account before real money.
You can read each bot’s stop rule in the marketplace without an account, and the custody and key rules are on the security page.
Educational content only. Stralines is software for executing and managing your own trading rules. Nothing here is investment advice, and trading carries risk of loss.