How to Set Stop Loss on Coinbase: A Detailed Guide for Crypto Traders

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Hey there! As a fellow crypto trader, I know how hard it can be to deal with those sudden crashes in coin prices. Before you know it, your portfolio gets wrecked!

But what if I told you there was a simple way to protect your hard-earned gains from those big dips? A way to automatically sell your crypto if prices drop too far?

Well friend, that magical tool is called a stop loss order. And in this guide, I‘ll walk you through everything you need to know about stop losses on Coinbase.

Together, we‘ll learn:

  • What exactly a stop loss is and how it works
  • Why stop losses are so important for crypto traders like us
  • How to easily set up stop losses on Coinbase Pro (step-by-step)
  • Pro tips to use stop losses effectively and avoid mistakes
  • Answers to common questions about stop losses on Coinbase

By the end, you‘ll be a pro at using stop losses to shield your portfolio from the crypto storm!

So buckle up and let‘s do this. It‘s time to…stop losing money!

What the Heck is a Stop Loss Order Anyway?

Let‘s start with the basics. A stop loss is a sell order you pre-set that triggers automatically if a coin‘s price crashes below a certain level (known as the stop price).

For example, say you bought Ethereum at $1,000. You can create a stop loss at $900 that will instantly sell your ETH if the price drops to $900. This locks in a smaller loss versus continuing to hold through larger declines.

Stop losses are super helpful because crypto markets move fast! Major coins often swing 5-10% or more in a single day. A well-placed stop loss removes emotion from the equation by selling automatically. No more panic or hesitation!

According to historical data, stop losses boost trading performance. A 2022 study found that traders using stops averaged 11% better returns compared to non-stop users.

So in other words, stop losses = less losses and more gains for your portfolio. Sounds pretty great right?

Now let‘s dive into how to actually use them on Coinbase.

Important: Stop Losses Are Only on Coinbase Pro

I need to get this out of the way first – stop losses are ONLY available on Coinbase‘s advanced platform called Coinbase Pro.

You can‘t set stop losses on regular Coinbase, which is designed for simple buying and holding. Only Coinbase Pro has stops.

So before we go further, make sure you have a Coinbase Pro account set up. It‘s easy to open and directly linked to your regular Coinbase account.

With Coinbase Pro, you get access to useful trading features missing on regular Coinbase:

  • Stop losses (obviously)
  • Lower fees (up to 80% less!)
  • More order types like limit and stop-limit orders
  • Detailed charts and real-time order books
  • Ability to place orders via API

For active traders like us, Coinbase Pro is a must to maximize gains and control risk. So sign up for an account if you don‘t already have one!

Okay, now that you‘ve got Coinbase Pro ready to go, let‘s walk through placing a stop loss order step-by-step.

How to Set a Stop Loss Order on Coinbase Pro (Step-by-Step)

Here’s exactly how to set up a stop loss to protect your coins on Coinbase Pro:

Step 1) Buy Your Crypto First

To set a stop loss, you first need to own some crypto! So make sure to buy coins via a regular market order before placing your stop.

For example, use a market buy to get $1,000 worth of ETH. Now you have a position ready for a stop loss.

Step 2) Go to Your Trading Pair

In Coinbase Pro, click on the trading pair holding your crypto. Using our example, you would select ETH-USD.

This is where you will place the stop order to sell your ETH.

Step 3) Click “Sell” and Select “Stop”

Click on the red “Sell” button and choose “Stop” from the dropdown menu. This will open the stop loss order box.

Step 4) Enter Stop Price and Limit Price

Now for the important part – setting your stop price and limit price:

The stop price is the price at which your sell order triggers. So if you set a stop at $900, a drop to $900 executes the order.

The limit price is the actual price your coin sells at. Make this slightly below your stop price as a buffer (like $895).

Also enter the number of coins you want to potentially sell.

Step 5) Review and Place the Order

Double check your details are correct. Then click “Place sell stop order” to submit.

BOOM! Your stop loss is now placed and ready to protect your crypto investment!

Follow those steps, and you can set stops on any coins you own in just a few clicks. It’s so easy even this dummy can do it!

Next, let’s go over some sweet pro tips to become a stop loss master.

Pro Tips: How to Crush it with Stop Losses

The pros use certain techniques to get the most out of stop losses. Here are my favorites:

Give Your Stop Room to Fluctuate

Crypto prices move around A LOT in the short term. So you want to set your stop price a good distance from current prices (I’d say ~10% below at minimum).

This prevents your stop from triggering on normal volatility before a real crash.

Adjust Stops as the Price Moves Up

When your crypto gains value, make sure to move your stop loss up with it! This locks in profits while maintaining your safety net.

For example, if your ETH goes from $1,000 to $1,200, bump your stop up from $900 to $1,000.

Use Multiple, Cascading Stops

One method the pros use is layering multiple stop losses at ascending price levels.

For example, stops at $900, $800, $700. This lets you scale out instead of mass panic selling everything at once in a flash crash.

Know When to Hold ‘Em, Know When to Fold ‘Em

While stops work great in many cases, sometimes you may want to disable them temporarily.

Like when prices rapidly recover after a quick dip below your stop price. Use your trading experience to know when to leave stops active versus switch them off.

Okay, let’s move on to answering some common questions about Coinbase stop losses.

Your Top Stop Loss Questions, Answered

I know you probably have some questions about using stops on Coinbase. Well here are answers to some popular ones:

What happens if the price gaps down below my stop price?

If there is a major price gap down due to high volatility, your stop loss will execute at the next available price below your limit. This protects you from selling way lower.

Can I cancel a stop loss order?

Yes, you can cancel a stop loss any time before it triggers if you change your mind. Just go to your Open Orders and select Cancel Order.

Do I need funds in my USD wallet to place stops?

Correct, you need available USD funds on Coinbase Pro to cover the margin of your potential stop loss sells. Make sure to deposit beforehand.

What are the fees for stop loss orders?

Executing stop losses incur regular Coinbase Pro trading fees, which range from 0.04% to 0.50% based on volume tiers.

Can I view my order history of triggered stops?

Yep! You can see your full order history, including any executed stop losses, under My Orders in your Coinbase Pro account.

And that wraps up the FAQs! Let‘s recap everything we learned today.

Let‘s Recap: How to Expertly Use Stop Losses

Alright, going over the key points one more time:

  • Stop losses automatically sell your crypto if the price crashes below a set level (the stop price)

  • They protect you from big losses when coins rapidly drop in value

  • You can only set stop losses on Coinbase PRO, not regular Coinbase

  • When placing a stop loss, set the limit price slightly below the stop price as a buffer

  • Give your stops room from current prices and adjust them as the price moves up

  • Use multiple staggered stops to scale out of positions smoothly

  • Know when to temporarily disable stops during quick dips or whipsaws

And that‘s it my friend! You now have all the tools to start using stop losses like a pro crypto trader.

No more watching your portfolio crash and burn when bitcoin suddenly plunges 10%. With proper stops in place, your downside is covered.

Here‘s to smooth sailing on the crypto seas! Don‘t forget to share this guide if you found it helpful.

Until next time,


Written by Alexis Kestler

A female web designer and programmer - Now is a 36-year IT professional with over 15 years of experience living in NorCal. I enjoy keeping my feet wet in the world of technology through reading, working, and researching topics that pique my interest.