Good Day,
Say I think eur/usd is going to go down. Right now it is at 100 and I think it is going to go to 90. I sell the eur/usd for 100, now do I place a limit or stop to buy it (close) at 90. I am confused and appreciate your help. Thanks.
DJ
if you want to go long, then you buy. If you want to go short, then sell. If you want to close your positions, then click the close button in the trade window.
DJ,
In the example you gave, you would place a limit order below your entry price, and you would place a stop order above your entry price.
The correct terms describing these orders are: buy-limit, and buy-stop. But, most traders simply refer to them as “limit”, “take profit”, or “TP”, on the one hand; and “stop”, stop-loss", or “SL”, on the other hand.
Here’s a way to keep stops and limits straight in your mind: [B]your stop always goes on the losing side of your entry price[/B],
[I]in order to stop your loss from becoming bigger[/I]; then, obviously, your limit goes on the other side (the profit side) of your entry price.
Clint