How Do You Analyze the Difference between Buy Limit Order & Buy Stop Order?
How to Analyze the Difference between Buy Limit Order & Buy Stop Order
A buy limit pending order is an order to buy xauusd at a better price after gold price has retraced from its current level.
A buy limit pending order is an order to buy at a lower gold price than the current price
A buy limit order is only executed when the prices falls & retraces to the set buy limit trade order level.
Entry Limit Orders: Buy Limit
Buy Limit Order definition - Entry limit is an order to buy xauusd at a certain price that is a retracement level where gold price is predicted to pullback to before resuming the original XAUUSD trend.
Traders use buy limit orders to buy at a better market price. These types of buy limit orders are provided for in most of online platforms, for our example we shall use MT4 platform.
A buy limit pending order of this type can be used by traders to buy below the market level (retracement in an up-ward trend market).
Buy limit - When buying, your entry buy limit pending order is executed when the market falls to your set price. ( pulls back down )
Entry orders are placed by traders when they expect price to bounce-back after reaching this point.
- Entry Buy Limit Orderbuy at a level below the current market price.
Buy Entry Limit Order Example
In the example shown below, the buy limit pending order was placed to buy at a gold price below the current market price. Point Marked B is point at which it was set.
Buy Limit Order Placed to Buy Below the Current Market Price - What's a Buy Limit Order?
The gold price then retraced and went down to hit the buy entry limit order, and afterward gold price continued to move up-wards in the direction of the original XAUUSD upwards trend. When the limit buy order was hit by price it changed to a buy gold trade order.
Price Hits Buy Limit Order
What is a Buy Stop Order?
What Does Buy Stop Order Mean?
A Buy Stop Order is an order to buy xauusd after the price rises to the set buy stop price level.
Buy stop pending order is always set to buy above existing market prices.
What is a Buy Stop Order Example?
In the examples illustrated below a buy stop order was placed to buy at a level above the current market price.
The gold price of the instrument then went up to hit buy stop order, and afterward gold price continued to move upwards.
Setting Buy Stop Order above Resistance Level - What's a Buy Stop Order?
The buy stop pending order is also used to set pending order when there a consolidation chart pattern on a chart. Buy stop order is used to set a buy order just above consolidation pattern as illustrated and shown below so that if there is a gold price break out upwards after the consolidation pattern then a new buy gold order is opened - by buy stop order once the buy stop price set is reached.
Setting Buy Stop Order in a Break Out - Buy Stop Order Definition and Examples
A Buy trade was generated from the above buy stop order when price broke a resistance level in the first example & when there was an upwards gold price break out after a market consolidation pattern on the second buy stop pending order example.
Read the Difference between Buy Limit Order & Buy Stop Order
