Smart trades on the GDC Trade platform: An overview

GDC Trade’s Smart Trade is a comprehensive stock exchange trading tool. It enables users to place multiple orders to hedge and minimize risks if the asset price moves in the opposite direction.

Smart Trade can be used to:

  • Secure the transaction during a deep correction by averaging the price of entry into the position
  • Minimize risks by placing stop-loss conditions without waiting for the execution of primary buy/sell orders
  • Increase profits by adding multiple take-profit (TP) levels per trade

Smart Trade is one of the key strategies used on the GDC Trade platform. Here, we take a detailed look at Smart Trade’s functions and explain how registered traders can add take-profit levels and apply a stop-loss.

General work scheme

Smart trade’s mechanism is generally based on the Martingale method and allows traders to create a chain of consecutive actions. Traders work from a correction, taking the following steps:

  • Setting a Buy/Sell Limit Order for the position set
  • Setting additional limit orders for averaging the position, therefore shifting the total entry point into the transaction
  • A smaller price movement is necessary to overlap the loss and reach the profit level due to the average value of the trade

The terminal works for Spot and Futures trading. When working with a Futures account, the option to select a margin and type of transaction is included.

Let's explore how to reproduce this scheme using GDC Trade…

Navigating the Smart Trade page

Choose a section

To enter Smart Trade, click on the 'Trade' section on the main panel of the GDC Trade website. Then select 'Smart Trade' from the drop-down list. Members will then see the familiar chart and trading tools.

Please note: The page interface changes depending on the type of platform a member’s GDC Trade account is linked to. In this example, we use the Binance exchange and quotations of the cryptocurrency pair BTC/USDT.

Options overview

In the price setting block there are basic and additional options for implementing the Martingale method:

  • Selection of different purchase conditions (price limit)
  • Application of stop-loss or BE stop-loss
  • Creating and adding take-profit (TP)

Please note: Regardless of the buy level, the maximum number of TP is always three. The key difference is only that the Take Profits of the lower order levels will be applied to the total amount.

At the bottom of the page, members can view and edit the list of orders along with open and completed trades.

Take-profit and stop-loss

A stop-loss (SL) level is a predefined coin price set below the order entry price, at which the position will be closed to minimize a trader's losses.

Take-profit (TP) levels fix the position at a predetermined, more favorable price. By setting the levels on the GDC Trade platform, the system will start regularly tracking the execution of buy orders within a smart deal. If the price reaches the second buy level (2 price limit), the system will cancel the TP level and leave the TP level 2 with the sale of the entire asset value.

How to average price position in the 'Smart Trade' section

Smart Trade’s main purpose is to protect a member’s deposit during a deep correction using the Martingale method:

  • By placing an order of the first level, a smaller portion of the deposit allocated to a given trading pair is generally used.
  • Each subsequent level implies an increase in the amount of the order to shift the average price of the position in case the price goes against the trader's planned movement.
  • For example: If a Level 1 buy order is placed at 18,500 for $100, the second level should have an entry point below the first level and at a higher amount - for instance, an entry at 18,100 (second level) for $150 would move the average purchase price of the asset to 18,258. In this case, the drawdown on the total position will be approximately -0.86% and a smaller price movement will be required to break even or go over.

  • Take-profit orders at each level are set considering the current average price of the position and the total amount of funds invested.

As soon as the first take-profit of a trade is executed, the strategy and the trade are considered to be ‘worked out’, and all unexecuted orders at lower levels and their take-profits are automatically deleted from the exchange.

The terminal on GDC trade has the main advantage of enabling traders to set the exit levels of the position by considering the average price of the deal and the full volume of the position involved in the deal.

Options and stop-loss settings to minimize losses

Standard stop-loss

For example, the correction is expected to be 30% and the position's set levels cover this movement. If the price correction continues, and the trader is not ready to risk a larger amount, they can set one of the stop-loss options. Traders can therefore limit the maximum possible loss on the position. As soon as the price reaches the stop-loss level, the system will close the entire position at the market price at a predetermined loss.

Break-even (BE) stop-loss

Break-even (BE) stop-loss means placing a stop-loss at the average entry price level into the position when part of the position is closed at take-profit. Closing the remainder of the position is done with a market contract if the price returns to the average price. All unexecuted lower transaction-level orders are canceled and the transaction status changes to 'closed.'

Example: When the price reaches the designated entry levels into the transaction, the corrective movement may stop and the moment of price reversal will occur. It’s impossible to predict how strong the reversal movement will be, therefore setting several take-profits in the ratio is recommended, for example: 40% / 40% / 20%.

Conditions for checking the activity levels:

  • If the order of the first level is passed and the second level has not yet been executed, then the take-profit of the first level remains active.
  • After the first level order execution, if the corrective movement continues and reaches the price of the second level order, the first level take-profit will be automatically canceled and the second level take-profit will be activated on the exchange.
  • A similar process occurs with subsequent levels.

Break-even stop-loss implies that as soon as the price reaches the first level of take-profit the system will then, with a sharp reversal to the average entry price, automatically close the position at the entry price.

Applying stop-loss and take-profit parameters, GDC members can make the trading process as safe as possible. And by dealing with stop-loss CU, members can guarantee profits from the market.

To summarize

Members can develop a strategy for working with a cryptocurrency pair a few steps ahead, then set the terminal to rest easy. GDC Trade will track the price, execute orders and ensure members are always in the black.

Secure your actions on the SPOT market and limit possible losses when trading crypto assets using GDC Trade’s intuitive platform. Happy trading!