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Difference between buy/sell stops & buy/sell limits

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  • Post #1
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  • First Post: Mar 20, 2007 2:56pm Mar 20, 2007 2:56pm
  •  vyder
  • | Joined Sep 2006 | Status: Pip Adept | 340 Posts
Hi everyone, I have been doing some reading on this and still dont quite understand the concept. I understand the buy/sell stop but I am still a little lost on the the buy/sell limits.

What is stopping someone from placing a sell stop at a high where you think it will retrace instead of a sell limit?

What are the differences?

thanks
  • Post #2
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  • Mar 20, 2007 3:06pm Mar 20, 2007 3:06pm
  •  faure
  • | Joined Aug 2006 | Status: there's a time for everything | 265 Posts
It's actually really simple. A buy limit order would be an order to buy the market at a price below the current price. A buy stop order would be an order to buy the market at a price above the current price.

It's just the inverse with sell orders.

A sell limit order would be an order to sell the market at a price above the current price. A sell stop order would be an order to sell the market at a price below the current price.

That's all there is to it.
 
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  • Post #3
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  • Mar 20, 2007 4:38pm Mar 20, 2007 4:38pm
  •  vyder
  • | Joined Sep 2006 | Status: Pip Adept | 340 Posts
thanks for the reply. can't you use a sell stop instead of a sell limit to enter the market?
 
 
  • Post #4
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  • Mar 21, 2007 9:35am Mar 21, 2007 9:35am
  •  faure
  • | Joined Aug 2006 | Status: there's a time for everything | 265 Posts
If you're sitting at the screen and press the sell button to execute immediately, that's a market order (short for at market). Stop and limit orders don't get executed straight away - the market has to reach those specified prices first.
 
 
  • Post #5
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  • Mar 21, 2007 11:59am Mar 21, 2007 11:59am
  •  mmont
  • | Joined Oct 2005 | Status: Member | 78 Posts
Quoting vder
Disliked
thanks for the reply. can't you use a sell stop instead of a sell limit to enter the market?
Ignored
You can on GFT and I would imagine on most others.
Of course, as been explained above ,your selling at a point below the present market.
 
 
  • Post #6
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  • Mar 21, 2007 12:14pm Mar 21, 2007 12:14pm
  •  smjones
  • Joined Mar 2006 | Status: THANK YOU MERLIN,TWEE and FF Team | 4,603 Posts
Maybe this will help
Attached Image
 
 
  • Post #7
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  • Mar 22, 2007 8:22am Mar 22, 2007 8:22am
  •  vyder
  • | Joined Sep 2006 | Status: Pip Adept | 340 Posts
thanks for the replies. smjones, in your chart, couldn't u use a sell stop instead of a sell limit? I am trying to find out why they are separate. If i want to sell at a higher price, can't I use a sell stop so that when the market goes up in my direction, it will trigger the sell stop with all the S/L & T/P info? I am sorry but I am still confused. I can understand that they are supposed to be used in various directions but I can see the advantage of using a sell over a limit etc.
 
 
  • Post #8
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  • Mar 22, 2007 9:52am Mar 22, 2007 9:52am
  •  faure
  • | Joined Aug 2006 | Status: there's a time for everything | 265 Posts
Quoting vder
Disliked
If i want to sell at a higher price, can't I use a sell stop so that when the market goes up in my direction, it will trigger the sell stop with all the S/L & T/P info?
Ignored
If you want to sell at a higher price it would be a limit sell order, by definition. Any sell order above the current price is a limit order, because that's the definition of a limit sell order. Any sell order below the current price is a stop sell order. And the reverse for buy stop/limit orders.

Hope this helps.
 
 
  • Post #9
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  • Mar 22, 2007 5:55pm Mar 22, 2007 5:55pm
  •  vyder
  • | Joined Sep 2006 | Status: Pip Adept | 340 Posts
I think trying to actually execute it in MT4 has shown me the visualization of what you guys are talking about. I am still unclear about something tho. With the sell limit, how is it executed? Does price have to be moving in your direction or does it just have to hit the price you have specified?

thanks.
 
 
  • Post #10
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  • Jun 7, 2007 11:35am Jun 7, 2007 11:35am
  •  zarathustra
  • | Joined Jun 2007 | Status: Member | 1 Post
In either case, orders are triggered as soon as the price is hit.

For stop orders, price would be moving in the same direction, and for limit orders it would be moving "against" the direction, hitting the price and hopefully reversing direction.
 
 
  • Post #11
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  • Mar 18, 2015 7:06pm Mar 18, 2015 7:06pm
  •  traddie
  • | Joined Mar 2015 | Status: Junior Member | 1 Post
Hi there,

Have a look at this video. It it very well explained in 3 min (faure explained it perfectly actually)

Inserted Video


Hope this helps
 
 
  • Post #12
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  • Mar 19, 2015 8:18am Mar 19, 2015 8:18am
  •  Tokolosh
  • | Joined Jul 2010 | Status: Member | 43 Posts
Pending Orders

Buy Stop = Going LONG once price comes UP to hit the entry
Buy Limit = Going LONG once price comes DOWN to hit the entry price
Sell Stop = Going SHORT once price comes DOWN to hit the entry
Sell Limit = Going SHORT once price comes UP to hit the entry price
 
 
  • Post #13
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  • Mar 19, 2015 8:47am Mar 19, 2015 8:47am
  •  davidcraigso
  • | Joined Jan 2015 | Status: Member | 65 Posts
Lots of nice answers.
 
 
  • Post #14
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  • Mar 21, 2015 8:57pm Mar 21, 2015 8:57pm
  •  Phantom-X
  • | Joined Jul 2014 | Status: Member | 148 Posts
I like to think of it in terms of breakouts.

All STOP orders are breakouts. In other words, you are going to buy or sell in that specific direction if the price keeps going in that direction.

If price is at 100, and you think it will go down, you could put a SELL STOP at 99. That means, if the price goes down to 99, you place a SELL order.
If price is at 100, and you think it will go up, you could put a BUY STOP at 101. That means, it the price goes up to 101, you place a BUY order.

STOP ORDERS = TRADING WITH THE DIRECTION OF PRICE.

Limit orders are different.

If price is at 100, and you want to buy it BUT YOU THINK IT WILL GO DOWN SOME MORE, you place a BUY LIMIT at 99. Now, you BUY once it goes DOWN to 99.
If price is at 100, and you want to sell it BUT YOU THINK IT WILL GO UP SOME MORE, you place a SELL LIMIT at 101. Now, you SELL once it goes UP to 101.

LIMIT ORDERS = TRADING AGAINST THE DIRECTION OF PRICE.
I am NOT an expert. I post to learn from others.
 
 
  • Post #15
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  • Mar 21, 2015 9:11pm Mar 21, 2015 9:11pm
  •  mastergunner
  • | Commercial Member | Joined Mar 2008 | 52 Posts
Or just trade with Oanda and let orders be orders and that's it.
 
 
  • Post #16
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  • Mar 22, 2015 12:00am Mar 22, 2015 12:00am
  •  Tokolosh
  • | Joined Jul 2010 | Status: Member | 43 Posts
Quoting davidcraigso
Disliked
Lots of nice answers.
Ignored
simple answers are usually the best ..............though you can take a simple answer and extrapolote it to the extent that you have to rub your head and say............what the?
 
 
  • Post #17
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  • May 16, 2015 7:53am May 16, 2015 7:53am
  •  Dunno67
  • | Commercial Member | Joined May 2015 | 159 Posts
thanks guys, really useful answers. I'm a newbie and use stop loss and tp at the moment only, but i would like to practise in setting different types of orders.
 
 
  • Post #18
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  • Jul 13, 2015 11:25pm Jul 13, 2015 11:25pm
  •  Deliciouspip
  • | Joined Feb 2015 | Status: Lording over the forex | 532 Posts
Quoting vyder
Disliked
Hi everyone, I have been doing some reading on this and still dont quite understand the concept. I understand the buy/sell stop but I am still a little lost on the the buy/sell limits. What is stopping someone from placing a sell stop at a high where you think it will retrace instead of a sell limit? What are the differences? thanks
Ignored
i use this lol

you will never forget
Attached Image
Perfecting your entry will increase your profits
 
 
  • Post #19
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  • Jul 21, 2015 5:36am Jul 21, 2015 5:36am
  •  JakubDvorak
  • | Joined Jul 2015 | Status: SpaceMarine | 17 Posts
I don't to copy all text here, but you may see the all information about it on mt5.com: MetaTrader 5 Help → Trading → Common Principles → Types of Orders → Types of Orders
Here is the pic also:
Attached Image (click to enlarge)
Click to Enlarge

Name: 300eebcd6622.gif
Size: 22 KB
 
 
  • Post #20
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  • Aug 11, 2015 11:11am Aug 11, 2015 11:11am
  •  san99
  • | Joined Jan 2014 | Status: Member | 653 Posts
Have also been searching for clearer explanations on this and finally found it here!

I am trying to understand the mechanics of the stop order better though.

I get the limit orders and that they are as follows:

BUY LIMIT => fill at ASK price you set
SELL LIMIT => fill at BID price you set

But with stop orders, is this how they work:

BUY STOP => fill at market ASK price once the BID price you set is reached?
SELL STOP => fill at market BID price once the ASK price you set is reached?

Confused on this because my limit orders have been executing perfectly. But with my stop orders, one recent example was:

SELL STOP G/N 2.3784 got executed at 2.37808 (which I believe was the BID when ASK was 2.3784). Is this how it works out though? I assumed once the BID reached 2.3784 my order should have gotten executed...
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