Expert Chaslau Koniukh
  • Companies
  • Global investment
  • Investors
  • Terminology
  • Economy
  • Stock Market
  • World exchanges
  • Tech and Marketing
stop-limit order
Market terminology

How to use a stop-limit order to trade the market

01.04.2024
2 min read

Stop-limit order: peculiarities of use

A stop-limit order is a request to the broker to open or close a trade that will occur in the future but at an already planned price. It includes the functions of limit and stop orders, but it is more efficient when a trader wants to find the best price. This order makes automating part of the trading tasks possible, thus saving time. In addition, understanding and using this type of order will allow you to develop your trading strategy to maximise profits.

Peculiarities of use

Stop-limit orders can be considered as an improved version of standard market orders. Their operating principles are identical. When selling an asset, traders set a price lower than the current one and higher when buying. At the same time, it is necessary to set a limit similar to the previously set price (or slightly higher) when buying and the same or lower when selling.
This approach allows the trader to set not a single value but a range between several values. No slippage can occur in this case, and the order can work within the set corridor.
If a broker has many opening or closing orders, he cannot always close all positions at the desired price. This means that he may not have time to consider all the orders. Using stop-limit orders with price ranges, the number of orders executed can increase significantly.
It is worth noting that when working with a stop-limit order, the broker can guarantee that all orders will be filled within the specified price corridor. However, he cannot guarantee the execution of the order itself, as the desired price level may not appear on the market. If such a situation is likely, it is better to use the standard Stop Loss option.stop-limit order to trade

Advantages and disadvantages of such orders

This type of order is mainly used for technical analysis. It shows efficiency in trading:
– using support and resistance values;
– for a flat break;
– trend-following;
– using news.
As for the advantages of using this approach, stop-limit orders provide a convenient setting of trades and the accuracy of their execution. It is a great tool for working with technical analysis, giving you the opportunity to maximise your profits. However, there is a risk of unfilled orders when using stop-limit orders, so it is essential to clearly understand the price opportunities. In addition, this trading strategy is rarely suitable for novice traders as it requires experience.
At the same time, if you take the time to understand the settings, you can get a reliable assistant to take over some of the routine tasks and increase your productivity in the market.

Tags: Market terminology
0
Previous Post Denso and Mitsubishi invest in silicon carbide production Next Post Timberland: how one of the most popular footwear brands evolved

You Might Also Like

third-tier stocks
Market terminology
Third tier stocks: risks and benefits of risky assets
07.06.2020
laddering
Market terminology
Laddering: essence of tactics and use for investment and IPO
04.03.2021
Anti-Martingale
Market terminology
Anti-Martingale strategy and its implementation in the Forex market
22.02.2021
bullish engulfing
Market terminology
The “bullish engulfing” pattern: features of the formation of candlesticks in the pattern
24.02.2023
duration of the coupon bond
Market terminology
Coupon bond duration: application of a tool to reduce investment risks
12.06.2021
system trading-1
Market terminology
System trading as a tool for market activity
18.01.2022

Popular Posts

  • Li Ka Shing: How can success be achieved without money and education?
  • Skolkovo analysts: the Russian energy market is suffering losses
  • Ingeborg Mootz: a woman who became a stock player at the age of 75
  • Analysts: Egypt’s economy to continue falling in 2023

Editor's Picks

Chaslau Koniukh
Analytics

American bankers from JPMorgan and Goldman Sachs advise to invest in gold: review by Chaslau Koniukh.

Press Secretary
17.08.2020
Expert Chaslau Koniukh
Analytics

Chaslau Koniukh on the analysts’ opinion on the key stake size change soon

Press Secretary
18.06.2020
expert Chaslau Koniukh
Analytics

Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.

Press Secretary
30.05.2020
Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh
Analytics

Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Press Secretary
16.05.2020

Popular Posts

  • Li Ka Shing: How can success be achieved without money and education?
  • Skolkovo analysts: the Russian energy market is suffering losses
  • Ingeborg Mootz: a woman who became a stock player at the age of 75
  • Analysts: Egypt’s economy to continue falling in 2023
  • Businessman Chuck Feeney: the man who gave the world Duty Free
Expert Chaslau Koniukh
  • Facebook
  • Twitter
  • Instagram

© 2024 CHASLAU KONIUKH. ALL RIGHTS RESERVED. Expert in marketing and project management, international investments, financial analyst.

Menu

  • Biography
  • Companies and corporations
  • Global investment
  • Investors and Entrepreneurs
  • Economy
  • Market terminology
  • Stock Market
  • World exchanges
  • Tech and Marketing
  • Analytics