I had been playing forex a while using the MT4 platform and not really that newbie. However, i never do any buy/sell stop/limit before. I only do market execution. This is because i never really understand them well.
What I had been researching, they said that:
Buy limit is “enter buy” at price below market price
Buy stop is “enter buy” at price above market price
Sell limit is “enter sell” at price above market price
Sell stop is “enter sell” at price below market price
My first question…if you notice, both buy limit/stop is “enter buy”. Which means that once it is enter, the more the price move upward, the more you profits right? Suppose now the price is at 1.2500 and i wanna enter buy when price drop to 1.2400 in order to counter, according to definition, i should use “buy limit” order. But what happened if i wanna issue “buy stop” order? Will the MT4 platform allow me to do so? (since it is actually “enter buy” pending order)
My second question, how do you put SL/TP in that pending order? In the same sample as above, once the price drop to 1.2400, my “enter buy” pending order will be activated. After that, if i wanna make it set the SL to be at 1.2350 and TP to be at 1.2450, how will i do it? Or there’s no way to do?
If you’re buying below price, you’ll put in a “buy limit” order, period.
If you want to issue a “buy stop” order ( for whatever reason ), make sure you want to enter above current price.
Keep it simple, and stop confusing yourself.
When defining limit or stop orders, the dialog has fields for entering the SL and TP (just like entry price)
If you use buy stop order to buy belowe the market price it will be rejected, ‘invalif stop/tp.’ You have the ability to add stop and take profit to your pending order while setting it, it’s pretty simple. Try demo trading before doing it in a live account
Simply put a buy limit is put when you put an entry that is currently below the market price and u expect it to rise again. A buy stop is an entry above the price. It’s the opposite for sell limit and sell stop. I diidn’t understand that last time but now i know.
A buy STOP is ahead of you like the bus STOP, price is rising, you hope it reaches your stop, lets you on, and then continues on it’s way up - say a break out trade above a resistance.
A buy LIMIT is behind you, price is falling, you hope the LIMIT of the fall is your order, it then reverses and goes up - say a reversal trade at support.
I seldom use buy/sell stops to enter a trade, the bus always seemed to stop for me alright, then would continue a short journey, and before I would have time to jump off it would hit reverse, fly past where I’d gotten on before stopping at my exit stop
I’m just finishing off PipSchool & although they talk future orders, they haven’t covered the implementation off it & it was something that I was playing about with today - with what we’ll class as zero success. I was getting “the rage” with the message “Invalid S/L & T/P” & luckily for me, this thread pops up
I found this rather enlightening & shall be putting all the info to good use so thank you all for the help.
