How Do I Analyze the Difference between Sell Stop Forex Order & Buy Limit Order?
Difference between Sell Stop Order & Buy Limit Order
What Does Sell Stop Forex Order Mean?
A Sell Stop Forex Order forex order is an order to sell a forex instrument after the price rises to the set sell stop forex price area.
The sell stop order is always set to sell below existing market forex prices.
What's Sell Stop Forex Order Example?
In the examples shown below a sell stop order was placed to sell at a level below the current market forex price.
The forex price of the forex instrument then went down to hit sell stop pending order, and afterward forex price continued to move downwards.
Setting Sell Stop Forex Order below Resistance Level
The sell stop order is also used to set a forex pending order when there is a consolidation pattern on a forex chart. Sell stop order is used to set a sell forex order just below consolidation pattern as shown and illustrated below so that if there is a forex price break-out downwards after the consolidation pattern then a new sell forex order is opened - by the sell stop order once the sell stop forex price that is set is reached.
Setting Sell Stop Forex Order in a Breakout
A Sell trade was generated from the above sell stop order when price broke a support level in first example & when there was a downwards forex price breakout after a forex market consolidation pattern on second sell stop order example.
What is Buy Limit Forex Order?
A buy limit order is an order to buy a forex instrument at a better forex price after forex price has retraced from its current area.
A buy limit pending order is an order to buy at a lower forex price than the current forex price
A buy limit order is only executed when forex instrument forex prices falls & retraces to the set buy limit order area.
What is Buy Limit Forex Order Example?
Buy Limit Forex Order order definition - Entry limit forex order is an order to buy a forex instrument at a certain forex price which is a retracement level where forex price is predicted to pull-back to before resuming the original Forex trend.
Forex traders use buy limit orders to buy at better market price. These types of buy limit orders are available in most of online trading softwares, for our example we shall be using the MT4 fx trading platform.
An entry buy limit order of this type can be used to buy below market level (retracement in an upward forex trend market).
Buy limit - When buying, your entry buy limit order is executed when market falls to your set forex price. (retraces down)
Entry orders are placed by traders when they expect forex price to bounce back after reaching this area.
- Entry Buy Limitbuy at a level below the current market level.
What is Buy Limit Forex Trading Order Example?
In the forex trading example below, the buy limit order was placed to buy at a forex price below the current market forex price. Point B is point at which it was set.
Buy Limit Forex Order Placed to Buy Below the Current Market Price
The forex instrument then retraced and went down to hit buy entry limit forex order, and afterward forex price continued to move upward in direction of the original Forex upward trend. When the limit buy forex order was hit it changed to a buy forex order.
Forex Price Hits Buy Limit Order
How Do I Interpret the Difference between Sell Stop Forex Order & Buy Limit Order?
