Buy Stop and Buy Limit orders?

What is the difference between Buy Stop and Buy Limit orders?

What is the difference between Buy Stop and Buy Limit orders?

For beginners on Forex tradeing, these commands may sound identical, but in fact they differ significantly. The limit order, for this example BUY LIMIT will be used when we expect the currency pair to go down and then reverse the trend. BUY LIMIT is set below the current market price and the purchase order is triggered if the price is the same or lower than the set limit – price ≤ limit.

With the Stop command it’s exactly the opposite. We will use this command where we think that if a price breaks a threshold, then we will continue to do so. So if we assume that the EURUSD market price will rise as soon as it touches 1.12751, set the BUY STOP command to that value. In the moment, the price on this boundary will rise or exceed, the purchase order will be triggered – price ≥ limit.

Buy Limit – purchase order occurs when: price ≤ value of the order
Buy Stop – occurs when: price ≥ set value

Sell ​​Limit – Sales order occurs when the price is ≥ set value
Sell ​​Stop – Sales order occurs when the price is ≤ set value

Leave a Reply

Your email address will not be published. Required fields are marked *

This website uses cookies. By continuing to browsing the site, you agree to our use of cookies.