TonyTrade.net
中文 Notify me

Home / Guides / Stop-losses on the exchange

Why stop-losses should sit on the exchange

This page answers: how a stop watched by local software differs from a stop order placed on the exchange; what happens to each when the network, computer or app goes down; how to pick the trigger price on Binance, OKX and Bitget; and whether exchange stops can slip.

A stop has to work while your computer is offline, so it has to live on the exchange. Even then, the fill price is not fixed. In a fast market it can be noticeably worse than the trigger.

The difference is who watches the price

Local stop: the stop price exists only inside the software. The software watches the market, and when the price reaches the stop it sends a market order to close. Until then the exchange has no idea you have a stop.

Exchange-side conditional order: the stop is sent to the exchange when the position opens. The exchange stores the trigger and closes the position when the price gets there, whether your software is running or not.

On a quiet day you can't tell them apart. The difference shows up when something goes wrong, which is exactly what a stop is for.

When the network, computer or app fails

SituationLocal stopExchange-side stop
Home internet dropsNo prices, no close order. The stop is dead.Still waiting on the exchange.
Computer sleeps, shuts down, loses powerSoftware not running. Stop is dead.Unaffected.
App crashes or hangsStop is dead until the app recovers.Unaffected.
Exchange API briefly unreachableThe close order may not get through.Already on the exchange; triggering doesn't need your connection.
Very fast price moveDelay between seeing the price and sending the order can miss the moment.Triggered by the exchange itself, without the round trip.

Software on your own laptop and phone hits the first three all the time: a closed lid, an app sent to the background, a router restart. That is why TonyTrade does not use local stops. See How it works.

What TonyTrade does

  • Every position opens with its stop on the exchange, using the exchange's own conditional order.
  • No stop, no position. If the exchange rejects the stop or it can't be placed, the position is not opened.
  • Reconcile on restart. Each time the app opens, it first asks the exchange for actual positions and open orders and lines up its records before doing anything else.
  • Stop-all button to halt everything at once.

The AI only drafts plans. A fixed rule engine checks each plan against your limits (per-trade size, total exposure, maximum leverage, maximum daily loss, coin whitelist, daily order count). Anything outside them needs your own confirmation. See Safety design and Features.

TP/SL orders and trigger prices on each exchange

A conditional order watches one kind of price. For futures the usual choices are last price (the most recent trade) and mark price (the exchange's fair-value price, used for liquidation). OKX also offers index price.

BinanceOKXBitget
Futures stop orderTP/SL (Stop Market, Stop Limit and others); conditional orders in the APITP/SL, an algo orderTP/SL
Trigger price optionsLast or mark (API workingType: CONTRACT_PRICE / MARK_PRICE)Last, mark or index (API slTriggerPxType: last / mark / index)Last or mark (API slTriggerBy: market / mark)
API defaultLast priceLast priceLast price
SpotStop-limit and similar orders, triggered by the pair's last priceTP/SL and trigger orders availableTP/SL available

Compiled from each exchange's API docs and help center. Names and parameters change; follow the exchange's current docs. Supported markets are on Exchanges.

Choosing between last and mark price ties into wicks, covered in Wicks and how to handle them. In short: a last-price trigger fills closer to your level; a mark-price trigger is harder for a brief bad print to set off, but the fill can land further from the trigger.

Exchange stops can slip too

A triggered stop starts the exit. It does not fix the price. All three exchanges say so.

  • Stop-market: once triggered, it fills against whatever is in the order book. In a fast or thin market, or when the price gaps, the fill can be some distance from the trigger, and a large order may walk through several levels. OKX's help page describes a price jumping straight across the trigger; Binance's own FAQ includes an example where the fill was far below the trigger.
  • Stop-limit: once triggered, it only places a limit order. If the price runs through the limit, the order may never fill and the position stays open.
  • Partial fills: one stop can fill in pieces at different prices. Your result is the average.
  • Checks at trigger time: the exchange checks position, balance and price limits when the order fires, and can refuse it.

In normal conditions a stop-market usually fills near its trigger. Large slippage mostly happens in violent, illiquid moments. It is not the norm, but it happens, often when you need the stop most.

A stop limits roughly how much you lose, not exactly how much. Size positions with room for slippage. The higher the leverage, the more the same slippage hurts your margin. Full risk notes are on Risk.
Market or limit? OKX's guidance is that for stop-losses in a fast adverse move, a market order is usually the better choice: a certain exit at an uncertain price. A limit gives price control but may not exit at all. Decide what the stop is for before choosing.

Practical checks

  1. After opening, look at the exchange's open orders or TP/SL page and confirm the stop is there.
  2. Check the stop's trigger type. Charts show last price by default; a mark-price stop may not fire even when the chart seems to touch it.
  3. After a manual partial close, check the stop quantity still matches.
  4. Don't place a futures stop too close to the liquidation price. Binance warns that liquidation may come first and the stop then expires.
  5. Don't edit the same position's stop by hand on the exchange while the app manages it. You risk closing twice or opening the other way.

Permissions needed to place stops: Safe API key permissions and API key setup. More on the FAQ. To hear when a version is available, leave your email. Site data handling is on Privacy; the team is on About. Back to the home page.

Sources

Official exchange pages cited here. Rules and screens change; the live page is what counts. Compiled by the TonyTrade team.