What's the Difference between Sell Limit Order and Buy Limit Order in Stock Indices Trading?
What is Sell Limit Order?
A sell limit order is an order to open sell indices at better price after price has retraced upward from its current area.
A sell limit order is an order to open sell after market retraces upwards within a downwards trend.
A sell limit order is only executed when prices moves upwards & retraces to the set sell limit area.
What is Sell Limit Order Example?
Sell Limit Order definition - Entry sell limit is an order to sell indices at a certain price which is a pullback area where price is predicted to pull-back to before it resumes the original trend.
Traders use these sell limit orders to open sell at better price. These types of sell limit orders are available in most of platforms, for our example we will be using MetaTrader 4 software platform.
An entry sell limit order of this type can be used to sell above trading market level (pull back in a down trend market).
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 price to pull-back downwards after reaching this area.
- Entry Sell Limit Ordersell at a level above the current market level.
Sell Limit Order
In the example explained and illustrated below a the sell limit order was put to sell at a price above the prevailing market price. This is the level for the price pullback.
Sell Limit Order Placed to Sell above Current Price - What's Sell Limit Order?
The price then rallied, went up to hit sell entry limit, and afterwards price continued to move downwards in direction of the original down ward trend.
Order now Changes to a Sell order - Sell Limit Order Definition & Example
When price got to the set sell limit order level the sell limit pending order changed in to a sell order, this is therefore a good method to sell at better price after a retracement move.
What's Buy Stop Order?
What Does Buy Stop Order Mean?
A Buy Stop Order is an order to buy indices after the price rises to the set buy stop price area.
The buy stop pending order is always set to buy above existing market prices.
Buy Stop Order
In the examples explained below a buy stop order was placed to buy at a level above current market price.
The price of the instrument then went upto hit buy stop pending order, & afterward price continued to move upward.
What's Buy Stop Order?
Buy stop order is also used to set pending order when there's a consolidation chart pattern on a chart. Buy stop order is used to place a buy order just above the consolidation pattern as shown below so that if there a price break-out upwards after the consolidation pattern then a new buy order is opened - by buy stop pending order once the buy stop price that is set is reached.
Setting Buy Stop Order in a Break-out - Buy Stop Order Definition Explained & Example
A Buy trade was generated from the above buy stop order when price broke a resistance level in the first examples & when there was an upward price break out after a market consolidation pattern on the second buy stop order examples.
