Entry Order in Indices and Limit Order in Indices

Limit order definition - Entry limit is an order to buy/sell a Indices at a certain price which is a pull-back area where stock price is predicted to pull-back to before it resumes the original Indices trend. Traders use them to buy or sell at better price. These types of trading orders are available in most of softwares, for our example we will be using MetaTrader 4 platform.

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

Buy limit - When buying, your entry buy limit is opened/executed when trading market falls to your set price. (pulls back downward)

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

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

Entry Buy Limit buy at a level below the current market level.

Entry Sell Limit sell at a level above current market level.

Buy Entry Limit Example

In the stock trading illustrations explained below, buy limit was placed to open buy trade at a level below the current price. Point B is point where it was set.

Limit Buy Order Entry Placed to Buy Below the Current Market Price

Limit buy order entry placed to buy below current price

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

Indices Price Hits Buy Limit Order, Order Now Changes to a Buy - Entry Limit Order

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

Sell Entry Limit Order

In the stock trading example illustration explained & shown below a the sell entry limit was set to sell at a level above the current market price. This is the level for the stock price pull back.

entry limit sell order placed to sell above the current market price - Entry Limit Trade Order

Entry limit sell pending order placed to sell above current market price

The stock index price then rallied, went up to hit sell entry limit, and afterwards stock price continued to move downwards in direction of the original Index downwards trend.

Indices Price Hits Sell Limit Order, Order Now Changes to a Sell Trade Order - Entry Limit Order

Index 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 henceforth a nice strategy to buy or sell at a better stock price after a price retracement move.

Setting Buy and Sell Limit Orders in MetaTrader 4 Platform

To set up these stock orders in MetaTrader 4 platform, Right Click on chart>>> Choose "Trading">>> Then Choose "New">>> Then on the pop up window that shows up (portrayed below), under label "Type" select option of "pending" instead of the "market execution">>> Under the pending stock order options choose the pending stock order type: for This trade select either "Buy Limit " or "Sell Limit " depending on whether you as a trader want to place a pending sell or buy.

Setting Buy & Sell Limit Orders in MT4 - Buy Limit Order & Sell Limit Order - Pending Orders

Putting Buy & Sell Limit Orders in MetaTrader 4 Platform

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

Fib Retracement Tutorial - Fib Retracement Guide

Tip: in Stock Index online trading, If you as a trader want to set a good tp order level (not retracement level, takeprofit level) for your trades you as a stock indices trader can use the Fib expansion 100% level for the best take profit area. To Read more on Stock Indices Fibo Retracement and Fibo expansion use the right navigating menu section Technical Analysis.

Fib Expansion Tool Lesson - Fib Expansion Tool Tutorial

Learn More Topics & Tutorials:

Trade Stock Indices

Entry Order in Indices and Limit Order in Indices

Buy Entry Limit Example

Sell Entry Limit Order

Setting Buy and Sell Limit Orders in MetaTrader 4 Platform