How does a trailing stop loss work with Diamond Pigs bots?

How does a trailing stop loss work with Diamond Pigs bots?

At Diamond Pigs, we use a trailing stop loss as part of our risk management strategy to help protect your gains and minimize losses — all automatically, with no need for manual intervention.

What Is a Trailing Stop Loss?

A trailing stop loss is a dynamic exit strategy that adjusts as the market moves in your favour. Unlike a fixed stop loss, it follows the price upward but stays put if the price starts to fall. Once the price drops by a certain percentage from its peak, the trade is automatically closed to secure your profits.

Example of a 5% Trailing Stop Loss

The trailing stop loss settings may vary depending on the specific strategy or market conditions.

Here is an example of a 5% trailing stop loss. That's how it works:

  1. Bot buys at: $1.00

  2. Price rises to: $1.20

  3. Trailing stop moves up to: $1.14 (5% below the $1.20 peak)

  4. If price falls to: $1.14 → The bot sells automatically to lock in gains

The trailing stop only moves upward with the price, never downward.

Why We Use It

  • Locks in profits as prices rise

  • Limits downside risk without needing constant monitoring

  • Removes emotions from selling decisions

  • Works automatically as part of each bot’s trading logic

Can I Customize the Percentage?

The trailing stop loss is determined by the SYNAPSE factory per individual bot to optimize each trade. It is dependent on historical data and current price movement, and cannot be changed by users.