Limit order question
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  1. #1
    Join Date
    Mar 2006
    Posts
    8

    Default Limit order question

    I need someone to explain to me what "Entry Limit Buy" and "Entry Stop Sell" aare? I don't understand why there are two kinds of limit orders. I am very confused and any help would be appreciated

  2. #2
    Join Date
    Apr 2006
    Posts
    1
    Hmm..let me think of the best way to explain this:

    Think of it like this:

    A limit order can be used in 2 ways: It can be used as a buy order below the current market price or it can be used as a sell order above the current market price.

    A stop order can also be used in 2 ways: It can be used as a buy order above the current market price or it can be used as a sell order below the current market price.

    Limit orders are used when you want to go against the trend. So if the price has been going up and you think it won't go up past a certain level, you can place a limit order at that level so that when it reaches that point, you will automatically sell and go against the trend.

    Stop orders go with the trend. If you want to "catch the wave" then this is the type of order you want to use.

    Hope that helps!

  3. #3
    Join Date
    May 2007
    Location
    Puerto Vallarta-Mexico
    Posts
    30
    Quote Originally Posted by Rangu View Post
    Hmm..let me think of the best way to explain this:

    Think of it like this:

    A limit order can be used in 2 ways: It can be used as a buy order below the current market price or it can be used as a sell order above the current market price.

    A stop order can also be used in 2 ways: It can be used as a buy order above the current market price or it can be used as a sell order below the current market price.

    Limit orders are used when you want to go against the trend. So if the price has been going up and you think it won't go up past a certain level, you can place a limit order at that level so that when it reaches that point, you will automatically sell and go against the trend.

    Stop orders go with the trend. If you want to "catch the wave" then this is the type of order you want to use.

    Hope that helps!

    Good explanation.

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