How Do I Analyze the Difference between Sell Stop Order & Buy Stop Order?

Difference between Sell Stop Order & Buy Stop Order

What Does Sell Stop Order Mean?

A Sell Stop Order order is an order to sell a forex instrument after the price rises to the set sell stop price region.

The sell stop order is always set to sell below existing market forex prices.

What's Sell Stop Order Example?

In the examples illustrated below a sell stop order was set 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, & afterwards forex price continued to move in a downward direction.

Placing Sell Stop Order below Resistance Level

The sell stop order is also used to set a pending order when there a consolidation setup on a chart. The Sell stop is used to set a sell order just below consolidation pattern as shown and illustrated below so that if there is a price breakout downwards after the consolidation setup then a new sell order is opened - by sell stop order once sell stop price which is set is attained.

Placing Sell Stop Order in a Breakout

A Sell trade was generated from the above sell stop order when the price broke a support level in first example & when there was a downward forex price breakout after a market consolidation pattern on second sell stop order example.

What's Buy Stop Order?

What Does Buy Stop Order Mean?

A Buy Stop Order order is an order to buy a forex instrument after the price rises to the set buy stop price region.

The buy stop order is always set to buy above existing market forex prices.

What is Buy Stop Order Example?

In the examples shown below a buy stop order was placed to buy at a level above the current market forex price.

The forex price of the forex instrument then went up to hit buy stop pending order, and afterwards forex price continued to move up-ward.

Setting Buy Stop Order above Resistance Level

The buy stop order is also used to place a pending order when there a consolidation setup on a chart. The Buy stop is used to set a buy order just above consolidation pattern as shown & illustrated below so that if there is a price breakout upward after the consolidation setup then a new buy order is opened - by buy stop order once the buy stop price which is set is attained.

Setting Buy Stop Order in a Breakout

A Buy trade was generated from the above buy stop order when price broke a resistance level in first example & when there was an upward price breakout after a market consolidation pattern on second buy stop order example.

How Do I Interpret the Difference between Sell Stop Order & Buy Stop Order?