Stop Loss Orders
LFJ allows you to protect your downside with onchain Stop Loss Orders. Whether you're managing risk on a volatile token or locking in gains before a pullback, stop loss orders can help automate your exit strategy.
There are two types of Stop Loss Orders available:
Stop Market – Sell immediately at market price when a stop price is triggered
Stop Limit – Trigger a limit order at a defined price when the stop price is hit
How Stop Market Orders Work
🛑 Stop Market Orders let you exit a position as soon as the price drops below a specific threshold. To create this order, you’ll simply set the amount of tokens to sell and the stop price.
Once the market falls below your stop price, LFJ’s Aggregator will execute a market sell using the best available onchain liquidity at that exact moment.
Use Stop Market When: You want to get out of a position fast if price breaks below a critical level.
Stop Market orders are subject to price wicks. If there's a sudden drop in a token price due to high price impact trade onchain, you might sell near the bottom of a red candle just before a quick recovery,
How Stop Limit Orders Work
⛓️ Stop Limit Orders give you more control by combining a stop price and a limit price. To create this order, you’ll set
Amount of tokens to sell
Stop price – the trigger point
Limit price – the price at which you're willing to sell
When the market drops below your stop price, LFJ creates a Limit Order using your chosen sale price. The trade will only execute if there’s enough liquidity at that price.
Use Stop Limit When: You want protection from wicks, and you're okay waiting for a bounce back to your price.
If price doesn’t recover to your limit price after the stop is triggered, your order may remain unfilled.
Fees on TWAP Orders
LFJ charges a 1% platform fee, applied when the trade is executed. This fee is deducted from the output tokens you receive upon sale.
Example Scenario
Stop Market Example
A user holds 1000 $TOKEN and sets a Stop Market order with a stop price of $0.90.
When price dips below $0.90, LFJ triggers a sell at the best available onchain rate.
User recieves stablecoins/native asset
Stop Limit Example
A user holds 1000 $TOKEN and sets a Stop Limit order (Stop price: $0.90, Limit price: $0.88)
When the price drops below $0.90, LFJ places a limit order to sell at $0.88.
If sufficient liquidity becomes available at $0.88, the order fills.
If price keeps falling and never returns to $0.88, the order remains open.
Last updated