In-depth Explanation for why stop orders are being canceled

The crypto market provides a non-stop 24/7 trading service; therefore, in order to save your time while reducing risks, the stop loss/take profit function becomes an effective choice. This article aims to introduce the KuCoin stop loss/take profit system and explain under what conditions your stop orders will be canceled. We hope that you can make a best-fit stop loss/take profit strategy by acknowledging the details below.

 

Situation 1: Insufficient Fund

Situation 2: Exceeds the KuCoin Price Protection Limit

Situation 3: Unable to Fill the Order or Unexpected Filled Price Due to Market Volatility

 

Situation 1: Insufficient Fund

We recommend you first to check the important upgrade messages of KuCoin stop loss/take profit function by clicking the link here.

After the upgrade, when you set stop orders, the system won't freeze any of your funds. The funds will only be frozen once the stop orders have been triggered. However, those orders will be canceled when user funds are insufficient.

For example, Tom has 32,000 USDT in his trading account while the current BTC price is 31,000 USDT. Tom is bullish on BTC price, thinking it will surge to 35,000 USDT once breaking the resistance level of 32,000, so Tom set a stop limit order as shown in the picture above. However, the BTC price remains quite stable; in this case, he chooses to lend out 30,000 USDT for profit instead.

There is only 2,000 USDT that remained in Tom’s account; when BTC finally reaches 32,000 USDT, his stop order should have been triggered. However, since the BTC lending is still in effect, the available balance becomes less, and it requires at least 32,100*0.5=16,050 USDT (except for the fee) to trigger the order. As a result, this order is canceled. In similar cases, the order will also be canceled if the funds have been frozen for other limit orders or other USDT trades.

 

Situation 2: Exceeds the KuCoin Price Protection Limit

To avoid extreme conditions and protect traders’ interests, KuCoin introduced an Immediately Executable Price Range (IEPR) in the spot market.

>>Learn more about price protection.
Price protection Limit = (Final transaction price – Best buy/sell price) / Best buy/sell price*100%

1. For stop-limit orders, there is no restriction for the trigger price or limit price. The system will automatically verify if the latest transaction price of this order has exceeded the KuCoin price protection limit; if so, then the part of the order within the price limit will be traded, while the rest will be canceled.

For example, Tom sets a stop-limit buy-in order as shown above, with the latest price limit for BTC price protection at 10%, and the current best available sell price in the order book being 32,100 USDT. Once the order has been triggered, the order will be sent to fill the order book. Then the system verified that the new price would reach 35,400 USDT (>10%) if the order has been fully filled, calculated by (35,400-32,100)/32,100=10.28%. This means the fully filled order will exceed the price protection limit of 10%; therefore, the remaining part of the order will be canceled to avoid risks.

2. For stop-market orders, the system will verify if the latest transaction price is within the range of the KuCoin price protection once it has been triggered and fully filled; if not, the rest of the order that exceeds the limit will be canceled.

For example, Tom set a stop-market buy-in order as shown above, and the limit for BTC price protection is 10%. If the best available sell price in the order book is 32,010 USDT. When BTC reaches 32,000 USDT, the order will be activated and sent to fill the order book. If the KuCoin system verifies that the new price will exceed the price protection limit at 36,000 USDT, calculated by (36,000-32,010)/32,010=12.46%, the remaining part of the order will be canceled, which can only be filled between 32,010 and 35,211 (32,010*110%).

 

Situation 3: Unable to Fill the Order or Unexpected Filled Price Due to Market Volatility

1. For stop-limit orders, they will be limit orders once it reaches the trigger price, so there will be some risks involved, such as the order can't be fully filled as normal limit orders if the price fluctuates rapidly. Those orders will sit in your open orders until it gets fully filled or canceled by other conditions.

For example, Tom sets a stop-limit sell order as shown in the above picture, and several situations might occur as below:
a. BTC price rises above 30,800 USDT after the order reaches the trigger price; in this case, the order will be fully filled with the best available buy-in prices in the order book.
b. BTC price fluctuates around 30,800 USDT after reaching the trigger price, then dropped to a price lower than 30,800 USDT. In this case, the order will be partially filled with the best available buy-in prices in the order book (above 30,800 USDT), while the rest is still in open order to be filled until it's been canceled.
c. BTC price quickly drops to a price lower than 30,800 USDT after reaching the trigger price; in this case, the order will stay in the open orders page until it gets fully filled (when the price goes back to 30,800 USDT) or canceled.

2. For stop-market orders, orders will be filled with the current market price once the trigger price is reached; in this case, there will be risks involved when the filled price deviates from the trigger price in market volatility. Also, part of the order might be canceled if the new price has exceeded the price protection limit.

For example, Tom sets a stop-market sell order as shown above, and the best buy-in price is 31,000 USDT after reaching the trigger price. The price protection limit is calculated as: 31,000-(31,000*10%) = 27,900. In this case, several situations might occur as stated below:
a. BTC price rises above 31,000 USDT after reaching the trigger price, then the order will be fully filled with the best available buy-in prices in the order book (no less than 31,000 USDT).
b. BTC price fluctuates around 31,000 USDT after reaching the trigger price, but still above 27,900 USDT. Then the order will be fully filled with the best available buy-in prices in the order book, with an average price above 27,900 USDT.
c. BTC price keeps dropping after the order is triggered and falls under 27,900 USDT. Since it exceeds the price protection limit, only those buy-in orders above 27,900 USDT will be filled, while the rest of the order will be canceled.