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BTC Price is 11000 $
I place a stop-loss order at 10950$ (trigger point), with a limit of 10900$.
If the BTC market value drops abruptly, the 10.900$ order may not be feasible to meet, and that opens 2 scenarios:
- A) The system sells bellow 10.900$ (so I could lose more than intended).
- B) The system only sells at 10.900$ (so I waits for that value to be met, which it may not).
I figure what goes on is A.
Since you mentioned that you use a limit stop-loss with($10,900), the system will set an order immediately on $10,900 once the price trigger at $10,950.
-Once their are no available orders at $10,900 when you set, it will not be trigger. Since you said it was abruptly, let's say you have sell order placed at $10,900, but on that price, no one want to buy your order, so the price continue to drop, lot of sellers are already above you, let's say some people put an order on $10,850, $10,800 and so on...
So, the answer will be letter
B, you will wait the price of bitcoin rise on $10,900 or above so your order placed will be executed.
But if you used the MARKET STOP-LOSS. The answer will be letter
A. I tried before when BTC value drops abruptly,
sell market stop-loss on $7,800 and I lost so much, it was executed at around $7,600.