Difference between stop-orders and limit-orders

What is the difference between limit-orders and stop-orders? From what I read they appear to be the same thing. They turn into real market orders when a specific price is reached.

They are just the location of the order relative to the market location. For instance if you want to short the market but it (the market price) is currently above the location you are wanting to short then you would place a Stop Sell order, that way as the market falls it will pick up your order. IF you want to short the market but it (the market price) is lower than where you want to enter, ie you want price to head higher still before getting short, then you would place a Limit Sell.

For the long side it is vice versa so a Stop long order would be above current price and a Limit would be lower.

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

Market orders are just that. They are entries at the current executed price.

I like drawings

Simple yet effective..a great way to answer a query..

So a sell limit and a buy stop are the same thing except for the direction?
Great drawing btw!

No,No,No!!!They are not the same things at all!

Limit order is an order of a certain condition. It will be proceeded when the price filled in by the trader executes. Sell limit order means that you are able to sell the instrument for your price or at a higher price. It is used for exiting from a Long position and entering a Short position.

Stop order will be opened when the price reaches the level (the level of price) which was indicated by the trader.

Buy Stop order means that you are able to buy the needed instrument when its level (price level) will be reached by the price indicated by the trader. It is used for entering a Long position and exiting from a Short position.

Hope, it helps

usually we use buy / sell stop order in breakout trading , I usually use stop order in nonfarmpayroll news trading.

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

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forexindicatorbest

Please review the responses posted above, they are not the same..

What will happen to stop order(with tp) when price create gap for news or weekend?

Imagine price is at 1.32 now. I have a stop sell order at 1.314, tp at 1.312.

Suddenly for news price is 1.3. Trade should be executed at 1.3 (next available price). Then what about tp order?

Will trade will be closed immediately with next available price for tp?

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

That’s the proper answer in a picture! Thank you.