Buy Stop and Sell Stop VS Buy Limit and Sell Limit

In the world of trading, there are orders that can be placed called "pending orders" which basically means you set the price at which the broker will "fulfill" the order.

Pending orders can be in the form of Buy Stop, Buy Limit, Sell Stop, Sell Limit - there is a lot of confusion about what these terms mean, though.

Let's start with Buy Stops and Buy Limits, and we are going to take it down to the very basics of what they mean:

Buy Stop: Means you are confident the market will CONTINUE to go up once it gets to a certain price, so you want your broker to place a Buy trade at that price. The market might be at 1.1100 and you want a Buy trade to be placed at 1.1200. A Buy Stop means a Buy trade will be placed at a price ABOVE the current market price.

Buy Limit: This is basically the same thing as a Buy Stop, except that you are confident that the market will REVERSE if it gets down to a certain price. The market might be at 1.1100 and you want your broker to place a trade if the market drops to 1.1000. A Buy Limit means a Buy trade will be placed at a price BELOW the current market price.

Sell Stop: This is the reverse of a Buy Stop. Basically, it means you are confident the market will CONTINUE to drop if it reaches a certain price, so you ask your broker to place a SELL trade at a price that is BELOW the current market price.

Sell Limit: This is the reverse of the Buy Limit. Basically, it means you are confident the market will REVERSE if it goes up to a certain price, so you ask your broker to place a SELL trade at a price that is ABOVE the current market price.

In the world of trading, there are orders that can be placed called "pending orders" which basically means you set the price at which the broker will "fulfill" the order.

Pending orders can be in the form of Buy Stop, Buy Limit, Sell Stop, Sell Limit - there is a lot of confusion about what these terms mean, though.

Let's start with Buy Stops and Buy Limits, and we are going to take it down to the very basics of what they mean:

Buy Stop: Means you are confident the market will CONTINUE to go up once it gets to a certain price, so you want your broker to place a Buy trade at that price. The market might be at 1.1100 and you want a Buy trade to be placed at 1.1200. A Buy Stop means a Buy trade will be placed at a price ABOVE the current market price.

Buy Limit: This is basically the same thing as a Buy Stop, except that you are confident that the market will REVERSE if it gets down to a certain price. The market might be at 1.1100 and you want your broker to place a trade if the market drops to 1.1000. A Buy Limit means a Buy trade will be placed at a price BELOW the current market price.

Sell Stop: This is the reverse of a Buy Stop. Basically, it means you are confident the market will CONTINUE to drop if it reaches a certain price, so you ask your broker to place a SELL trade at a price that is BELOW the current market price.

Sell Limit: This is the reverse of the Buy Limit. Basically, it means you are confident the market will REVERSE if it goes up to a certain price, so you ask your broker to place a SELL trade at a price that is ABOVE the current market price.

In the world of trading, there are orders that can be placed called "pending orders" which basically means you set the price at which the broker will "fulfill" the order.

Pending orders can be in the form of Buy Stop, Buy Limit, Sell Stop, Sell Limit - there is a lot of confusion about what these terms mean, though.

Let's start with Buy Stops and Buy Limits, and we are going to take it down to the very basics of what they mean:

Buy Stop: Means you are confident the market will CONTINUE to go up once it gets to a certain price, so you want your broker to place a Buy trade at that price. The market might be at 1.1100 and you want a Buy trade to be placed at 1.1200. A Buy Stop means a Buy trade will be placed at a price ABOVE the current market price.

Buy Limit: This is basically the same thing as a Buy Stop, except that you are confident that the market will REVERSE if it gets down to a certain price. The market might be at 1.1100 and you want your broker to place a trade if the market drops to 1.1000. A Buy Limit means a Buy trade will be placed at a price BELOW the current market price.

Sell Stop: This is the reverse of a Buy Stop. Basically, it means you are confident the market will CONTINUE to drop if it reaches a certain price, so you ask your broker to place a SELL trade at a price that is BELOW the current market price.

Sell Limit: This is the reverse of the Buy Limit. Basically, it means you are confident the market will REVERSE if it goes up to a certain price, so you ask your broker to place a SELL trade at a price that is ABOVE the current market price.

In the world of trading, there are orders that can be placed called "pending orders" which basically means you set the price at which the broker will "fulfill" the order.

Pending orders can be in the form of Buy Stop, Buy Limit, Sell Stop, Sell Limit - there is a lot of confusion about what these terms mean, though.

Let's start with Buy Stops and Buy Limits, and we are going to take it down to the very basics of what they mean:

Buy Stop: Means you are confident the market will CONTINUE to go up once it gets to a certain price, so you want your broker to place a Buy trade at that price. The market might be at 1.1100 and you want a Buy trade to be placed at 1.1200. A Buy Stop means a Buy trade will be placed at a price ABOVE the current market price.

Buy Limit: This is basically the same thing as a Buy Stop, except that you are confident that the market will REVERSE if it gets down to a certain price. The market might be at 1.1100 and you want your broker to place a trade if the market drops to 1.1000. A Buy Limit means a Buy trade will be placed at a price BELOW the current market price.

Sell Stop: This is the reverse of a Buy Stop. Basically, it means you are confident the market will CONTINUE to drop if it reaches a certain price, so you ask your broker to place a SELL trade at a price that is BELOW the current market price.

Sell Limit: This is the reverse of the Buy Limit. Basically, it means you are confident the market will REVERSE if it goes up to a certain price, so you ask your broker to place a SELL trade at a price that is ABOVE the current market price.

In the world of trading, there are orders that can be placed called "pending orders" which basically means you set the price at which the broker will "fulfill" the order.

Pending orders can be in the form of Buy Stop, Buy Limit, Sell Stop, Sell Limit - there is a lot of confusion about what these terms mean, though.

Let's start with Buy Stops and Buy Limits, and we are going to take it down to the very basics of what they mean:

Buy Stop: Means you are confident the market will CONTINUE to go up once it gets to a certain price, so you want your broker to place a Buy trade at that price. The market might be at 1.1100 and you want a Buy trade to be placed at 1.1200. A Buy Stop means a Buy trade will be placed at a price ABOVE the current market price.

Buy Limit: This is basically the same thing as a Buy Stop, except that you are confident that the market will REVERSE if it gets down to a certain price. The market might be at 1.1100 and you want your broker to place a trade if the market drops to 1.1000. A Buy Limit means a Buy trade will be placed at a price BELOW the current market price.

Sell Stop: This is the reverse of a Buy Stop. Basically, it means you are confident the market will CONTINUE to drop if it reaches a certain price, so you ask your broker to place a SELL trade at a price that is BELOW the current market price.

Sell Limit: This is the reverse of the Buy Limit. Basically, it means you are confident the market will REVERSE if it goes up to a certain price, so you ask your broker to place a SELL trade at a price that is ABOVE the current market price.

In the world of trading, there are orders that can be placed called "pending orders" which basically means you set the price at which the broker will "fulfill" the order.

Pending orders can be in the form of Buy Stop, Buy Limit, Sell Stop, Sell Limit - there is a lot of confusion about what these terms mean, though.

Let's start with Buy Stops and Buy Limits, and we are going to take it down to the very basics of what they mean:

Buy Stop: Means you are confident the market will CONTINUE to go up once it gets to a certain price, so you want your broker to place a Buy trade at that price. The market might be at 1.1100 and you want a Buy trade to be placed at 1.1200. A Buy Stop means a Buy trade will be placed at a price ABOVE the current market price.

Buy Limit: This is basically the same thing as a Buy Stop, except that you are confident that the market will REVERSE if it gets down to a certain price. The market might be at 1.1100 and you want your broker to place a trade if the market drops to 1.1000. A Buy Limit means a Buy trade will be placed at a price BELOW the current market price.

Sell Stop: This is the reverse of a Buy Stop. Basically, it means you are confident the market will CONTINUE to drop if it reaches a certain price, so you ask your broker to place a SELL trade at a price that is BELOW the current market price.

Sell Limit: This is the reverse of the Buy Limit. Basically, it means you are confident the market will REVERSE if it goes up to a certain price, so you ask your broker to place a SELL trade at a price that is ABOVE the current market price.

In the world of trading, there are orders that can be placed called "pending orders" which basically means you set the price at which the broker will "fulfill" the order.

Pending orders can be in the form of Buy Stop, Buy Limit, Sell Stop, Sell Limit - there is a lot of confusion about what these terms mean, though.

Let's start with Buy Stops and Buy Limits, and we are going to take it down to the very basics of what they mean:

Buy Stop: Means you are confident the market will CONTINUE to go up once it gets to a certain price, so you want your broker to place a Buy trade at that price. The market might be at 1.1100 and you want a Buy trade to be placed at 1.1200. A Buy Stop means a Buy trade will be placed at a price ABOVE the current market price.

Buy Limit: This is basically the same thing as a Buy Stop, except that you are confident that the market will REVERSE if it gets down to a certain price. The market might be at 1.1100 and you want your broker to place a trade if the market drops to 1.1000. A Buy Limit means a Buy trade will be placed at a price BELOW the current market price.

Sell Stop: This is the reverse of a Buy Stop. Basically, it means you are confident the market will CONTINUE to drop if it reaches a certain price, so you ask your broker to place a SELL trade at a price that is BELOW the current market price.

Sell Limit: This is the reverse of the Buy Limit. Basically, it means you are confident the market will REVERSE if it goes up to a certain price, so you ask your broker to place a SELL trade at a price that is ABOVE the current market price.

What is the difference between a buy limit and a sell stop order?

A buy limit order is a specific type of buy order used to enter a market, while a sell-stop order is a sell order that can be used either to initiate a short sell position or to close out an existing buy position.

A trader uses a buy-limit order to attempt to enter a market on the buy side at a specific price that he believes to be an advantageous entry point. For example, a stock may have advanced in price from $30 to $50, at which point the market encounters resistance and begins to flatten out. The trader expects the market to retrace approximately 50% of its move upward from $30 to $50, so he places a buy-limit order to buy the stock at $41 a share or better.

The buy-limit order means that the order, if filled, will be filled at the specified price or better, but it does not guarantee that the order will be filled at all. It's important for traders to keep the bid-ask spread in mind when placing limit orders. A buy order will only be filled if the ask price falls to the specified limit order price.

When a sell stop order is triggered, it means selling at the best available price when the market trades at the price level (which must be below the current market price when the order is placed) specified in the order. A sell-stop order can be used for one of two purposes. It can be used either to initiate a sell position in a market or to close out an existing buy position. In the latter case, it is called a stop-loss order.

For example, if a trader has bought a stock at $35 a share, but wishes to risk no more than a $5 per share loss on the trade, then he places a sell stop-loss order just below the $30 a share level, perhaps at $29.50. If the market price falls to the $29.50 level or lower, then the stop-loss order is triggered, and the trader's stock is sold.

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A:Different types of orders allow you to be more specific about how you'd like your broker to fill your trades. When you place a stop or limit order, you are telling your broker that you don't want the market price (the current price at which a stock is trading), but that you want your order to be executed when the stock price moves in a certain direction.
With a stop order, your trade will be executed only when the security you want to buy or sell reaches a particular price (the stop price). Once the stock has reached this price, a stop order essentially becomes a market order and is filled. For instance, if you own shares of JC Penney (JCP), which currently trades at $5.60, and you place a stop order to sell it at $5.00, your order will only be filled if stock JCP drops below $5.00. Also known as a "stop-loss order", this strategy allows you to limit your losses. However, this type of order can also be used to guarantee profits. For example, assume that you bought stock JCP at $4.50 per share and now the stock is trading at $5.60 per share. Placing a stop order at $5.00 will guarantee profits of approximately $0.50 per share, depending on how quickly the market order can be filled.

Stop orders are particularly advantageous to investors who are unable to monitor their stocks for a period of time, and brokerages may even set these stop orders for no charge.
A limit order is an order that sets the maximum or minimum at which you are willing to buy or sell a particular stock. For instance, if you want to buy stock JCP, which is trading at $5.60, you can set a limit order for $5.50. This guarantees that you will pay no more than $5.50 to buy this stock. Once the stock reaches $5.50 or less, you will automatically buy a predetermined amount of shares. On the other hand, if you own JC Penney trading at $5.60, you could place a limit order to sell it at $6.10. This guarantees that the stock will be sold at $6.10 or more.One disadvantage of the stop order is that the order is not guaranteed to be filled at the preferred price that the investor states. Once the stop order has been triggered, it turns into a market order, which is filled at the best possible price. This price may be lower than the price specified by the stop order. Moreover, investors must be conscientious about where they set a stop order. It may be unfavorable if it is activated by a short-term fluctuation in the stock's price. For example, if stock JCP is relatively volatile and fluctuates by 15% on a weekly basis, a stop loss set at 10% below the current price may result in the order being triggered at an inopportune or premature time.
The primary advantage of a limit order is that it guarantees that the trade will be made at a particular price or better; however, your brokerage will probably charge a higher commission for the limit order, and it's possible that your order will not be executed at all if the limit price is not reached.

Buy limit orders are a special type of order regular traders use, that can have significant impact on your binary options trading.

Binary options traders should therefore know what buy limit orders are and where there are likely to occur. Combined with an understanding of stop loss orders, buy limit orders can provide a binary options trader with a number of good investment opportunities.

Start earning now or continue reading the article on Buy limit orders below the table…

What is a buy limit order?

A buy limit order is an order to buy an asset at a specified price or below. By placing a buy limit order, a trader can ensure that he does not pay more than a certain price to buy an asset.

If a stock is currently trading at a price of $100, but a trader is not willing to pay more than $95 for the stock, he can place a buy limit order at $95. As soon as the market reaches the target price, the buy limit order turns into a market order and is executed immediately.

The trader is therefore guaranteed to pay his predefined price or less. He is, however, not guaranteed that his order will ever be executed. If the market never reaches $95, his order will never be triggered.

Because of the special nature of buy limit orders they occur in bunches in significant places. A trader looking to invest in a resistance level, for example a trend line in an uptrend or the lower resistance in a continuation pattern, could use a buy limit order to automatically open a new position once the market moves near the resistance. The trader can then benefit from the likely turnaround.

How to profit from buy limit orders with binary options

Buy limit orders occur in bunches around significant price levels like support levels. If they get triggered, there will be sudden increase in demand. Prices are determined by the relationship of demand and supply, which means that a sudden increase in demand will also lead to a sudden increase in prices.

If you are able to spot price levels where many buy limit orders are triggered, you can use the sudden price increase they generate to invest in a binary option.

Depending on your trading strategy, you could use a High option to profit from the increasing price. If you can anticipate the range of the movement, either by experience or using additional instruments such as technical indicators, you can also use a Touch option or even a Boundary option and make an even bigger profit.

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Feb 23, 2017 - In the world of trading, there are orders that can be placed called "pending orders" which basically means you set the price at which the broker will "fulfill" the order. Pending orders can be in the form of Buy Stop, Buy Limit, Sell Stop, Sell Limit - there is a lot of confusion about what these terms mean, though.

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Hi everyone, I have been doing some reading on this and still dont quite understand the concept. I understand the buy/sell stop but I am still a little lost on the the buy/sell limits. What is stopping someone from placing a sell stop at a high where you think it will retrace instead of a sell limit? What are the ...

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