Managing risk is one of the most critical aspects of successful trading—especially in leveraged environments like perpetual and futures contracts. One of the most effective tools for risk management is the Take Profit (TP) and Stop Loss (SL) mechanism. Modern trading platforms have evolved significantly, offering enhanced TP/SL features that allow traders to automate their exit strategies with precision.
Bybit’s recent upgrade to its Take Profit and Stop Loss system empowers traders to set both TP and SL orders simultaneously when placing limit, market, or conditional orders. This improvement streamlines trade execution and enhances control over open positions, allowing users to modify TP/SL prices even before order execution.
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How Take Profit and Stop Loss Work
The core purpose of these tools is simple:
- Take Profit (TP): Automatically closes a position when the market reaches a predefined favorable price, locking in profits.
- Stop Loss (SL): Automatically exits a position when the market moves against you, limiting potential losses.
These orders execute based on trigger conditions such as price, return rate, or percentage change, depending on platform settings. Once triggered, they are executed as either market orders (immediate execution at best available price) or limit orders (execution only at specified price or better), giving traders flexibility in how they manage exits.
Two Key TP/SL Modes: Full Position vs. Partial Position
Traders can now choose between two distinct modes when setting up their exit strategy:
1. Entire Position Mode
- Applies TP/SL to the full size of the open position.
- Only one TP/SL order is allowed per position.
- When triggered, it closes the entire position via a market order.
This mode suits traders who want an all-or-nothing approach—either fully capitalize on gains or cut losses completely.
2. Current Order / Partial Position Mode
- Applies TP/SL only to a portion of the position or the current order.
- Allows multiple TP/SL orders on the same position.
- Supports both market and limit-type conditional orders (limit available only in partial mode).
- If both TP and SL are set, triggering one automatically cancels the other.
This mode offers greater strategic depth, enabling tiered profit-taking or hedging portions of a larger trade.
Key Improvements After Platform Upgrade
Compared to earlier versions, the updated TP/SL system introduces several enhancements:
- Flexible Scope Selection: Choose between entire or partial position application without manual workarounds.
- More Trigger Conditions: Set triggers based on price, ROI, percentage change, or P&L.
- Order Type Support: Use either conditional market or limit orders for exits.
- Dynamic Adjustment: TP/SL quantities adjust automatically when adding or reducing position size.
- Multiple Orders Allowed: Set multiple partial TP/SL orders (up to platform limits), increasing tactical flexibility.
These upgrades make it easier than ever to implement complex trading strategies without constant manual oversight.
Practical Examples of TP/SL in Action
Example 1: Multiple Partial Take Profits with Full Stop Loss
Trader A holds 1 BTC long at $25,000 and sets:
- TP A: Sell 0.5 BTC at $26,000 (market)
- TP B: Sell 0.5 BTC via limit order at $30,500 (triggered at $30,000)
- SL C: Full stop loss at $23,000 (market)
If price hits $26,000 → 0.5 BTC sold. Remaining 0.5 BTC still active under TP B and SL C.
If price then reaches $30,000 → Limit sell order placed at $30,500.
→ If filled: remaining 0.5 BTC sold; SL C canceled.
→ If price drops to $23,000 first: SL triggers, closes remaining 0.4 BTC at market; TP B canceled.
This strategy allows profit capture at multiple levels while maintaining downside protection.
Example 2: Adding New Orders with Independent TP/SL
Trader opens 1 BTC long with partial TP at $26,000 (0.5 BTC). Then places a new buy limit at $24,000 with its own TP/SL at $27,000/$22,000 for 1 BTC.
As new fills occur, separate TP/SL sets apply only to those specific entries—enabling layered entry and exit logic.
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Frequently Asked Questions (FAQ)
Q: How do I view my active and historical TP/SL orders?
A: Active TP/SL orders appear under Current Orders. Completed or canceled ones can be found in Order History.
Q: Can I set more TP/SL quantity than my current position?
A: Yes, but execution will be capped at your actual position size. Excess amounts won't create reverse positions.
Q: Why does my 50% stop loss equal the liquidation price?
A: This often happens at maximum leverage (e.g., 100x). With 1% initial margin and 0.5% maintenance margin, a 50% drawdown aligns with liquidation thresholds.
Q: Can I set a stop loss below the liquidation price?
A: Yes—platforms allow this for strategic flexibility. However, such orders may not prevent liquidation if market slippage occurs.
Q: What happens if my position exceeds max order size during TP/SL execution?
A: The system splits the close into chunks (e.g., 100 BTC each). Up to six auto-submissions occur; remaining balance must be closed manually.
Q: Why was my position liquidated despite having a stop loss?
A: Liquidation uses mark price, not last traded price. If mark price hits liquidation level before your SL triggers—or if slippage causes greater loss than your margin—the system may prioritize liquidation over SL to protect the insurance fund.
Final Thoughts
Effective use of Take Profit and Stop Loss orders is essential for disciplined trading in volatile markets. The upgraded functionality on platforms like Bybit enables granular control over risk exposure, supports multi-tiered profit strategies, and adapts dynamically to changing position sizes.
Whether you're scaling into positions or managing large leveraged trades, mastering these tools helps preserve capital and lock in gains—automatically and efficiently.
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