I am so confused with placing a pending order. If I want to go long, and I want to put in an order at an entry price that is above the current market price, is this a buy stop or a buy limit order? Also, why do I always get an ‘Invalid S/L or T/P’ when i I try to place an order. Can someone break this down for me, and give an actual example? I appreciate it…thanks!
Think of it like a street. If you’re driving down the road and come to a stop sign, what do you do? You [B]stop[/B], then continue on in the same direction. This is a buy (or sell) stop. You want the price to keep going in the same direction. Which direction the trade will go is determined by whether it’s a buy or sell, and the fact that it’s a stop means you want the price to continue in the same direction.
What if you’re driving down a street and the road ends? You’ve hit the [B]limit [/B]of the street, and have to turn aound and go the other way. This is a buy (or sell) limit. You want to the price to hit a certain point, and turn around and go the other way.
Make sense? If not I’ll try to give more examples. 
Wow, thanks Phil, for responding so fast! Very kind of you…So with a buy stop, if i want to go long and want the price to keep going up,that makes sense. but why would you place a buy limit if you want the price to hit the ceiling and turn down…if you want to be in a long trade…? i don’t get it. also, my demo/broker requires a 50 pip difference in placing an order…(any thoughts on this, as to the amount, 50 seems high)…! thankyou again! pippy…
That’s my fault, my description was a little misleading. You wouldn’t place a buy limit if you want it to hit a ceiling and turn down, you would do sell limit. It’s so confusing because you are wanting the price to go up to trigger a sell order. Those two things seem like opposites.
If price is currently at 1.5000, and you believe it’s going to go down to 1.4000 and then shoot back up you would place a buy limit.
Thanks Phil for breaking it down “Barney Style” as my son would say. It makes perfect sense!
lol barney style is cute