Types of orders - please correct me with my example inside

Beginner Questions
1

I have gone through babypips school particularly types of order here Types of Forex Orders - BabyPips.com
Unfortunately, I cannot comprehend it 100% and this has force me to bring in my example below so someone can kindly help out. Ok enough said and here it is…say I want to go SHORT on GBP/USD as follow

Entry Point: 1.55340
Take Profit: 1.55000
Stop Loss: 1.55650

But current market price is 1.55070 and I know for sure it will get to my entry point before falling but can’t wait for it to happen.

My question is what kind of ORDER will I execute and how many pips will I be down?
2. If answer to question 1 is a SELL LIMIT ORDER, can I add take profit/loss to it before it execute on my absence?
3. If the order did not execute, will my account be charged?
4. Can I replace the stop loss above with a trailing stop of 30pips? Thank you all.

2

Hope this helps.

3

You will place Sell limit order at your desired price and of course you can always edit stop loss/take profit.
If the order ain’t executed than you will not be charged(not even a single penny).
Yes you can replace the stop loss with your desired trailing stop whenever you want.

4

@daydreamer65, thanks a lot for clarifying my doubt. Lastly what if I wanted to use same example for BUY STOP and SELL STOP, how does it look like in the above example?. Cheers

5

STOP and LIMIT are similar but different. you can do either BUY STOP or BUY LIMIT, and 8 times out of 10 you’d get the same trade result.

HOWEVER, if the market is moving QUICKLY or is flicking back-n-forth a lot, you’ll end up seeing a difference.

STOP is just a trigger to buy/sell once the price touches that point - REGARDLESS of what the price does in the seconds that it takes to fulfill your order.

LIMIT is a trigger plus inherent condition, same trigger as stop but condition is that it will only fulfill if the price is to your advantage in the seconds between being triggered and order completion.

so, let’s say you’re SHORT. you have a stop at some price point. if the price suddenly zips past the stop and then comes right back, a STOP will trigger and execute no matter what, but a LIMIT will trigger but only finish executing if the price remains in your favour long enough to finish executing. if the blip lasts 0.1 seconds, a STOP will finish closing your trade, while a LIMIT may only close a part of it, or nothing at all, or all of it.

this is why a STOP LOSS is a stop, and not a limit. a stop limit would trigger but not get you out cuz the price would be to your DISadvantage after it’s triggered.

a TAKE PROFIT can be either a STOP or a LIMIT. a stop will take any profit it can once triggered, a limit will only take any profit that’s better than the trigger price.

6

These are all on MT4

You can only use sell limit with the prices as they are.

It all depends upon where price is at the moment.

buy stop 1.5534 (you are going long from entry) s/l 1.5500 t/p 1.5560 Price at the moment below 1.5534 Continuation

sell stop 1.5534 (you are going short from entry) s/l 1.56 t/p 1.54 price at the moment needs to be above 1.5534 continuation

buy limit 1.5534 (you are going long from entry) s/l 1.55 t/p 1.56 price at the moment is above 1.5534 reverse

sell limit = reverse.

Buy & sell stops are continuation orders for price either above or below entry.

buy & sell limits reverse the direction of the market from either above or below entry price.

7

If you are using the terms BUY STOP and BUY LIMIT as they are commonly understood in the trading world, then your statements are incorrect.

[B]Regarding your first statement, above:[/B]

A BUY STOP order can be placed [B]only above[/B] the current market price (at the time the order is entered), and a
BUY LIMIT order can be placed [B]only below[/B] the current market price (at the time the order is entered).

In other words, it is impossible to place a BUY STOP order and a BUY LIMIT order [B]with the same trigger price.[/B]

[B]Regarding your second statement, above:[/B]

A TAKE PROFIT order refers to a BUY LIMIT order initially placed [B]below your entry price[/B] (if you are SHORT), or a
SELL LIMIT order initially placed [B]above your entry price[/B] (if you are LONG).

A TAKE PROFIT order, as commonly understood, does not include the concept of being stopped out for a profit.

Here is a post from some time ago, including a table illustrating 5 order types, which might be helpful to you —

http://forums.babypips.com/fundamental-ville/41354-different-order-types-why-would-you-need-them.html#post289619

8

Clint - we’re both right. i guess i was originally thinking more in terms of what the raw terms mean (ie. conceptually), but yes once the broker adds the feature into the platform they toss out the ‘silly’ combinations so the user is only left with the more sensible ones as you indicated.

then again, i’ll admit to not having used these types of orders for 1-2 years now as i typically trade based on what the price/indicators are telling me. i ditched the idea of having a fixed TP figure (or a hard SL as well, which granted at times is a bit risky).

-EFL