Entry Order in Indices and Limit Order in Indices

Limit order definition - Entry limit is an order to buy or sell a Indices at a certain price which is a retracement level where stock price is predicted to pull-back to before resuming the original Indices trend. Indices traders use them to buy or sell at better market price. These types of orders are available in most of softwares, for our example we will be using MT4 trading software.

An entry of this type can be used to buy below the stock trading market level (up indices trend market retracement) or sell above stock trading market level (down trend market retracement).

Buy limit - When buying, your entry buy limit is executed when trading market falls to your set price. (retraces down)

Sell limit - When selling, your entry sell limit is executed when trading market rises to your set price. (retraces up)

Entry orders are placed by traders when they expect stock price to bounce back after reaching this area.

• Entry Buy Limit Orderbuy at a level below the current market level.

• Entry Sell Limit Ordersell at a level above the current market level.

Buy Entry Limit Example

In the stock trading examples explained below, the buy limit order was placed to buy at a price below the current market price. Point B is point at which it was set.

Limit buy order entry placed to buy below current market price

The stock price then retraced and went down to hit buy entry limit, and afterwards stock price continued to move upward in direction of the original Indices upward trend. When the limit buy order was hit it changed into a buy.

Indices Price hits buy limit, order now changes to a buy

Sell Entry Limit Order

In the stock trading example explained and illustrated below a the sell entry limit was placed to sell at a price above the current market price. This is the level for the stock price retracement.

Entry limit sell order placed to sell above current market price

The stock price then rallied, went up to hit sell entry limit, and afterwards stock price continued to move downward in direction of the original Stock Indices down-wards trend.

Indices Price hits sell limit, order now changes to a sell

When indices trading quote got to the set level the trading order changed in to a sell, this is therefore a nice strategy to buy or sell at a better stock price after a retracement move.

Setting Buy and Sell Limit Orders in MT4 Software

To set up these stock orders in MetaTrader 4 software, Right-click on Indices chart>>> Choose "Trading">>> Then Select "New">>> Then on the popup panel that pops up (illustrated below), under label "Type" select option of "pending" instead of "market execution">>> Under the pending stock order options select the pending stock order type: for This trade select either "Buy Limit Order" or "Sell Limit Order" depending on whether you want to place a pending buy or sell.

Setting Buy & Sell Limit Orders in MT4 Software

Sometimes, setting the point value to place your trade can be tricky, setting to far might mean your entry market limit not getting executed, the best tool to use is Fibo retracement indicator and use the 38.20% retracement levels. This retracement level is watched by many traders and entry orders tend to crowd at this level, therefore the best odds to catch a trade would be presented by using the 38.2% Fibo retracement level.

Fib Retracement Tutorial - Fibonacci Retracement Tutorial

Tip: in Indices online trading, If you want to set a good take profit level (not retracement level, take profit level) for your trades you can use the Fibonacci expansion 100% level for the best take profit area. To Read more on Stock Indices Trading Fibo Retracement and Fibo expansion use the right navigation menu section Technical Analysis.

Fib Expansion Tool Tutorial - Fib Expansion Tool Tutorial