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docs: Add stoploss order type explainer

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closes #12984
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Matthias
2026-04-01 22:20:34 +02:00
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docs/stoploss.md
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@@ -39,6 +39,22 @@ The Order-type will be ignored if only one mode is available.
In that case, the bot will fallback to using the `emergency_exit` order type to place a market order as placing the stoploss order failed.
Freqtrade currently does not implement a limitation to avoid this situation, so please ensure your stoploss values are within reasonable limits for your exchange or disable stoploss on exchange.
### Which order type is used for stoploss on exchange?
The order type used for stoploss on exchange is determined by the `stoploss` value and the exchange capabilities.
If your selected exchange supports both stop-limit and stop-market orders, then the `stoploss` value will determine which order type is used for stoploss on exchange.
If your exchange only supports one of the two order types, you must configure your `stoploss` value accordingly, otherwise the bot will fail to start.
### Which order type should i use for stoploss on exchange?
If we translate the two stoploss order types into human words - they would be something like this:
* **stoploss-market** -> "when stop triggers, get me the hell out of here at whatever price".
* **stoploss-limit** -> "when stop triggers, place a limit order x% below the stoploss price. I accept a loss of "stoploss + 1%" at worst - but if price jumps further - i accept to wait for price to get back down to me, potentially resulting in a much bigger loss than "stoploss + 1%".
As a consequence, we recommend using stoploss-market orders whenever possible, as the main point of a stoploss is to get you out of a position when the market is crashing, and in such situations, you'll want to exit the position immediately at the best available price, rather than risking a limit order not getting filled and potentially incurring even greater losses.
The choice is ultimately up to you, but please be aware of the risk of using stoploss-limit orders, especially in volatile markets.
### stoploss_on_exchange and stoploss_on_exchange_limit_ratio
Enable or Disable stop loss on exchange.