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Thread: Difference between stop-orders and limit-orders

  1. #1
    What's the difference between limit-orders and stop-orders? From what I see they appear to be the same thing. They become actual market orders if a specific price is reached.

  2. #2

  3. #3
    Quote Originally Posted by ;
    I like drawings
    Simple yet Powerful.. A great way to answer a query. .

  4. #4
    Therefore a market limit along with a buy stop are the exact same thing but for the management?
    Fantastic drawing btw!

  5. #5
    Quote Originally Posted by ;
    Thus a sell limit along with a buy stop are the exact same thing except for the management?
    Fantastic drawing btw!
    No,No,No!!! They are not the very same things at all!

    Limit order is an order of a specific condition. It'll be proceeded when the price filled in by the trader implements. Sell limit order means that you can sell the tool to your price or in a greater price. It's used for exiting from a Long position and inputting a brief position.

    Stop order is going to likely be opened when the price reaches the level (the amount of price) that was signaled from the trader.

    Buy Stop order means that you can buy the required instrument when its amount (price level) will be reached from the price indied by the trader. It's used for inputting a Long position and departing out of a brief position.

    Hope it will help

  6. #6
    Generally we use buy / sell stop order in breakout trading , I typically use stop order in nonfarmpayroll news trading.

    And we usually use limit order to receive a good price in the current price, buy in low price and sell in high price

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    http://www.forexindiorbest.com/

  7. #7
    Quote Originally Posted by ;
    Thus a market limit and a buy stop would be the same thing but for the management?
    Great drawing btw!
    Please examine the responses posted above, they are not similar. .

  8. #8
    What's going to happen to prevent order(with tp) when price create gap for news or weekend?

    Picture price is currently at 1.32 now. I've a stop market order at 1.314, tp at 1.312.

    Suddenly for news price is 1.3. Trade should be implemented at 1.3 (next accessible price). What about tp order?

    Will commerce will be closed instantly with next available price for tp?

    Or I have to close it manually and tp is worthless here?

  9. #9
    Quote Originally Posted by ;
    What is the distinction between limit-orders and stop-orders? From what I see they seem to be the exact same thing. They turn into actual market orders if a specific price is reached.
    They are only the loion of the order relative to the market loion. For instance if you want to short the market but it (the market price) is currently over the loion you are wanting to short then you'd place a Stop Sell order, like the market falls it will pick up your order. In the event you want to short the market but it (the market price) is lower than where you want to input, ie you need price to head higher still before becoming short, then you'd place a Limit Sell.

    For the long side it's vice versa therefore a Stop long order could be over current price and a Limit would be lower.

    The accent of a STOP order is that you are entering the market with the current leadership as opposed to the LIMIT you are entering against it ie Picking tops to market and buying dips.

    Market orders are only that. They are entrances at the current implemented price.

  10. #10
    Quote Originally Posted by ;
    I like drawings picture
    That's the proper answer in an image! Thank you.

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