Limit order
What is a limit order?
Limit order (limit order) - it's a group pending orders, for which the opening of a position is made at a price better than the current one. It is implied that the price will rise or fall to a certain limit, after which it will turn in the right direction.
Limit orders are characterized by the word limit, which is used in their name.
What types of limit orders are there?
There are 2 types of limit orders:
- Buy Limit
Buy Limit - Limit order on purchase. The position on purchase opens at decrease in the price to the value specified in the warrant.
A Buy Limit order is usually used to buy when the price decreases to the uptrend support line or the lower limit of the flat, hoping for a subsequent bounce from it and resumption of growth.
- Sell Limit
Sell Limit - Limit order on sale. The position on purchase opens at growth of the price to the value specified in the warrant.
A Sell Limit order is usually used to sell when the price rises to the downtrend resistance line or the upper limit of the flat, with the expectation of a subsequent bounce from it and resumption of the decline.
What is the advantage of limit orders?
The use of limit orders gives the trader significant advantages in trading. Working with pending limit orders allows the trader to save his time without waiting for the right price in the market (for example, when the price bounces off the support or resistance line). In addition, limit orders reduce the risk slipsThat is, they guarantee the exact execution at the price specified in the order.
Order of a limit order (limit order) is contained on the company server, so its execution will happen even if your computer is turned off.