What is a Stop-Limit Order?
Conditional orders users are very useful tools, as it is well known by the people who frequently make transactions in stock exchanges. These orders, named stop limit, stop loss and conditional order, come up as stop-limit on exchanges such as Binance, Huobi, OKEx. In this article, we will explain what stop-limit order is and how to use it. Have a pleasant reading.
What is Stop-Limit Order?
Stop-Limit is a conditional order type used in stock exchanges. In this type of order, a trigger price is set. When the lowest selling price exceeds the trigger price in the stop-limit orders given for the purchase transaction, the purchase order occurs. With the stop-limit order, an increase can be achieved.
The target in stop-limit orders related to sales is to be protected in order not to face any decrease. It is often used for less damage and for profit protection. The operating mechanism of the sales stop-limits is made by creating a sales order if the highest purchase order falls below the trigger price you set.
How to Use Stop-Limit Order
We will try to illustrate how stop-limit order is used in the most effective way. There are two types of stop-limit orders: Buy Limit and Sell Stop.
How to Use Stop-Limit for Sale
To give an example, we are talking about purely representative figures, suppose that Bitcoin is now 15,000 USDT; we have made a purchase at the level of 10,000 and we will have made a good profit on sale. But we want to sell it when the graph increases slightly. However, we are hesitant because of the fluctuating course of cryptocurrency markets.
Here is where the stop limit helps us. Until the highest purchase order falls below 15,000 USDT, that is, up to 14,000 USDT, we apply conditional orders to sell our cryptocurrency. You can guarantee the operation by entering the limit value below the stop value. You can also do this to reduce your damage.
Use of Stop-Limit for Buying
As in the above-mentioned stop-limit for sale purposes, Bitcoin is worth 15,000 USDT. Let’s assume that this level has fallen from USD 18,000. We are sure that the chart will go up but we do not have time. We can make a profit by creating a stop-limit order in order not to miss the rise with a big fluctuation at one night.
In this article, we have given information about stop-limit orders. You can make your cryptocurrency valuable by giving buy and sell orders. You can get further information about Bitcoin, Ethereum, Ripple, Tether, Dash, Litecoin, BNB Coin on our blog page. If you want to trade on Binance, Huobi and OKEx exchanges, you can check out our guiding articles.
Investment information, comments and recommendations contained herein are not included in the scope of investment advisory. Therefore, making an investment decision based solely on the information and comments contained herein may not produce results that are in line with your expectations.