Entry CFDs Order in CFD Trading and Limit CFDs Order in CFD
Limit order definition - Entry limit is an order to buy or sell a CFD Trading at a certain cfd price which is a retracement level where cfd price is predicted to pull-back to before resuming the original CFD trend. CFD traders use them to buy or sell at better market price. These types of orders are available in most online trading softwares, for our example we shall be using the MetaTrader 4 cfds trading platform.
An entry of this type can be used to buy below the cfd market level (up cfd trend market retracement) or sell above the cfd market level (down cfd trend cfds trading market retracement).
Buy limit - When buying, your entry buy limit is executed when the cfd market falls to your set cfd price. ( retraces down )
Sell limit - When selling, your entry sell limit is executed when the cfd market rises to your set cfd price. ( retraces up )
Entry orders are placed by traders when they expect cfd price to bounce back after reaching this level.
- Entry Buy Limit CFD Orderbuy at a level below the current market price.
- Entry Sell Limit CFD Ordersell at a level above the current market price.
Buy Entry Limit Example
In the cfd example explained below, the buy limit order was placed to buy at a cfd price below the current market cfd price. Point Marked B is the point at which it was set.
Limit buy order entry placed to buy below the current market cfd price
The cfd price then retraced and went down to hit the buy entry limit, and afterwards cfd price continued to move upwards in the direction of the original CFD Trading upward trend. When the limit buy order was hit it changed in to a buy.
CFD Price hits buy limit, order now changes to a buy
Sell Entry Limit CFD Order
In the cfd example explained and illustrated below a the sell entry limit was placed to sell at a cfd price above the current market cfd price. This is the level for the cfd price retracement.
Entry limit sell order placed to sell above the current market cfd price
The cfd price then rallied, went up to hit the sell entry limit, and afterwards cfd price continued to move downward in the direction of the original CFD Trading downwards trend.
CFD Price hits sell limit, order now changes to a sell
When cfd quote hit the set level the order changed to a sell, this is therefore a nice technique to buy or sell at a better cfd price after a retracement.
Setting Buy and Sell Limit CFD Orders on MT4 Software
To set up these cfds trading orders on MetaTrader 4 platform, Right click on CFD Trading chart>>> Select 'Trading'>>> Then Select 'New'>>> Then on the popup window that appears (shown and illustrated below), under label 'Type' select option of 'pending' instead of 'market execution'>>> Under the pending cfd order options select the pending cfds trading order type: For This trade choose either "Buy Limit CFD Order" or "Sell Limit CFDs Order" depending on whether you want to place a pending buy or sell.
Setting Buy & Sell Limit CFD Orders on MT4 Platform
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 Fibonacci retracement indicator and use the 38.20% retracement levels. This retracement level is watched by many traders & 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.
Fibonacci Retracement Tutorial - CFDs Fibonacci Retracement Tutorial
Tip: In CFD 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 CFDs Fib Retracement and Fibonacci expansion use the right navigation menu section Technical Analysis.
CFD Fibonacci Expansion Tool Tutorial - CFD Fibonacci Expansion Tool Tutorial
