Automating entries with pending orders: how far do you take it?
Limit and stop orders let the market enter your trades for you, removing the hesitation at the moment of truth. The risk is mechanical: orders fill on spikes and gaps you'd have skipped manually.
How do you use them?
- the setups you place orders for in advance
- the expiry and cancellation rules
- the spike that filled you where you didn't want to be
The order types guide explains each order's behaviour.
Background: Market, limit and stop orders: which order type to use
The order types on a trading platform decide when and at what price you enter or exit. What each one does, and the mistakes that cost traders money.
What is the difference between a buy limit and a buy stop?
A buy limit is placed below the current price to buy on a dip. A buy stop is placed above the current price to buy if the price breaks higher.
Does a stop-loss guarantee the exit price?
No. A standard stop-loss becomes a market order when triggered and can fill beyond its level in a gap or fast market. Guaranteed stops, where offered, cost extra.
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