FAQ What's the Difference Between Stop Loss and Limit Orders?

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Legendary member
7,135 1,909
There is now a good selection of answers to this FAQ. To avoid a lot of unnecessary duplication, from now on - please provide specific examples of when you use the order types that you do and provide reasons as to why you use them. Practical examples are what's required, ideally accompanied by annotated charts. Posts that don't add anything to the answers provided so far are liable to be subject to some rigorous monthly housekeeping!


Active member
105 3
You can also have a stop limit, which is where you place a stop order but say you will only give so much slippage...i.e...working a stop at 5850 on Ftse with a limit of 2 tic's, so 5848 and no more, this is a very dangerous because if the market gaps by trading say 5851 then next print is 5847 then you wont be stopped out. I would recomend that never use a stop limit for this reason.
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Experienced member
1,161 157
when it hits your limit you are the dogs when it hits your stop the computer goes through the window


77 2
Good question. The first gets you out of a trade and the other gets you in. Stop Losses used to Close at certain price; to stop losses getting worse but also for protecting profits on winners. I use them to make sure I get out at worst-case scenario, but choose your levels carefully – not too close to prior lows/highs or you might get spiked out. Limit Orders are to Open at a certain price, or better. They’re good for getting a certain price (you won’t pay worse), but you’ve got no guarantee of getting into trade unless market trades there. Hope this helps.


3 0
learning how to set my stop-losses properly was one of the biggest benefits for me as far as loss prevention. When i first started my biggest losses came when i was trading on margin and didn't set my stop correctly.

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