limit order

[McMathews]

Hi all
I am confused with the concept of limit order and stop loss order? Last time I was reading a journal and it stated that limit order is helpful to traders who order the broker to trade behalf of them only in specific condition. Can any one discuss this in detail?
Regards
:clap::clap::clap::clap:

 

[futuresforex]

Limit Orders is a type of entry order, that only get executed when price reaches your set limit price. You want to buy the financial instrument (stocks,futures,forex,etc) at a specified price, or better. You can usually specify the time length that the order is to be active for as well.

Buy Limits are when you expect the price to come down to hit your limit buy order. The buy limit order can only be executed if price reaches the limit order price or below.

Sell Limits are when you expect the price to come up to hit your limit sell order. The sell limit order can only be executed if price reaches the limit order price or above.

Stop Loss orders are nothing more than market orders which are executed when the price reaches a certain point. They guarantee execution, but do not guarantee any price.

 

[trader_dante]

Hi McMathews,

If it helps, you can think of a limit order as going against the flow or LIMITING the momentum.

E.g. To place a limit SELL order, you have to place it above the market. Therefore you are anticipating that this is the limit to which it will trade.

 

[timsk]

Hi McMathews,
You make me want to cry!

You've asked this question already here: trading methods
and I replied with a link to this FAQ: What's the difference between Stop Loss and Limit orders? Please, please, please tell me in what way the FAQ fails to answer the question to the extent that you feel there's no point posting to the FAQ itself and need to start a whole new thread on the subject?!?! The FAQs are written specifically with new members like you in mind and if they aren't working (as they appear not to be in your case) - then I really need to know why so that I can correct and make them more effective.
Thank you in advance for your feedback!
Tim.

 

[anley]

Open a demo account and do 101 trades where you don't care about losing or winning. All you care about is working out in real-time and in real markets what all the different orders are and how they work.

After you've done 101 trades and if you're still unsure then do another 101.

 

[TradeTraka]

Hi McMathews,

If it helps, you can think of a limit order as going against the flow or LIMITING the momentum.

E.g. To place a limit SELL order, you have to place it above the market. Therefore you are anticipating that this is the limit to which it will trade.

This is a very good definition.

I also like to think of a Limit Order as one which is MORE favourable, so you will sell or buy once price has moved to a level that will give you MORE profit.

A Stop order is the opposite, it will make you LESS profit than where price is now. So if you placed a Stop Sell order, you would be going to sell once price had fallen from where it currently is.