Entry Limit Orders: Buy Entry Limit and Sell Entry Limit - Limit Order in Forex

Limit order definition - An Entry limit is an order to buy/sell a Forex currency at a certain price which is a pull back area where price is predicted to retrace to before it resumes the original and initial trend. Traders use them to buy/sell at a better market price. These types of trade orders are available in most online trade platforms, for our example we shall be using the MetaTrader 4 software.

An entry of this type can be used to open buy position below the market level (up trend market retracement) or sell above market level (downtrend market retracement).

Buy limit - When buying, your entry buy limit is executed/opened when market falls to price that you set. (retraces downward)

Sell limit - When selling, your entry sell limit is executed/opened when the market rises to price that you set. (retraces up)

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

Entry Buy Limitbuy at a point below the ruling market level.

Entry Sell Limitsell at a price point above the ruling market level.

Buy Entry Limit Example

In the example illustration below, buy limit pending order was set to open buy at a price below the ruling market price. Point B is the point at which it was set.

Entry Limit Order - Pending Orders

Limit buy order entry placed to open a buy below prevailing market price

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

Price Hits Buy Limit, Order Now Changes to a Buy - Where and How to Set Limit Orders

Price hits buy limit, order now changes to a buy

Sell Entry Limit Order

In the illustration put on display below a sell entry limit was set to open a sell at a point above current price. This is the level for the price pullback.

Entry Limit Sell order Placed on Chart to Sell Above the Current Price - Buy Limit Order & Sell Limit

Entry limit sell order placed to open sell above current price

The currency then rallied, went upto hit the sell entry limit, & afterwards the price continued to move downwards in direction of the original and initial downward trend.

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

Price hits sell limit, order now changes to a sell

When forex quote hit the set level the trade order changed to a sell, this is therefore a nice method to buy or sell at a better price after a pull back.

Setting Buy & Sell Limit Orders in MT4 Platform

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

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

Setting Buy & Sell Limit Orders on the MT4

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

Fib Retracement Lesson - Fib Retracement Tutorial

Tip: In online trading, If you as the trader want to set a good tp order level (not retracement level, takeprofit level) for your trade transactions you as a trader can use the Fib extension 100% level for the best tp order area. To Read more on FX Fibo Retracement and Fib expansion use the right navigating menu section Technical Analysis.

Fibonacci Expansion Tool Tutorial - Fibonacci Expansion Tool Tutorial

Study More Lessons and Tutorials & Topics:

Trade Forex Trading

Entry Limit Orders: Buy Entry Limit and Sell Entry Limit - Limit Order in Forex

Buy Entry Limit Example

Sell Entry Limit Order

Setting Buy & Sell Limit Orders in MT4 Platform