I just began an in-depth demo or CitiFX Pro, and the option of entering Limit Order is a question for me. Perhaps I do not understand this too well hence I am here. Can someone please clarify for me if my assessment is correct?
I am on the one minute chart and let’s say it is at 1.2670 up on a trend (bullish). But I placed a short / limit order of say 1.260 expecting it to turn back. When I place this limit order, the order is immediately placed when it says specifically LIMIT order. Thus if the price never reverses and it hits up to 1.2690 then I would lose 30 pips - I would manually cancel order. My impression was that the 1.2660 short / limit order I placed was only going to execute if the price only reversed and it hit that amount which I set a limit amount for. Can someone please clarify if this is correct? Or am I mistaken with this concept? Is there a better way of doing such order entry? Thank you.
limit orders are orders that get executed when the price hits that value so yes, if the price hits that value then continues going up you will be making a loss untill it reverses.
The only way to make a short order that will execute when the price is coming down is a pending sell stop order, but you can only set this kind of an order when the price is already above the order level and it will execute if the price drops and hits the sell stop order.
If you want to set a sell order while the price is going up that will execute if the price passes it and then drops back down to it you would have to write a special script to open an order when that criteria is met.
We can’t tell if that order would work because there are no prices listed.
A sell limit must be placed above the market because limits are “or better” orders. That means if you put in an order to sell EUR/USD at 1.30 you will get filled at that price or higher. If the current market price is 1.31 then you will immediately get filled because the current price is better than your limit.
As SDC said, if you want to sell below the market you use a stop order. Stops are filled at or worse than your price.
