If I Enter on a Limit, Can I Place My Protective Stop at the Same Time? (2024)

FAQs

If I Enter on a Limit, Can I Place My Protective Stop at the Same Time? ›

Not only is it possible to enter the market on a limit and place a protective stop at the same time, but it is encouraged to help protect large losses and manage risk.

Placing a one-cancels-the-other order (OCO), or what is also commonly referred to as a bracket order, allows you to have both a limit order and a stop order open at the same time. This allows you to lock in your potential profits if a limit is reached and stop your losses if the stop is triggered all with one order.

A bracket order is an advanced order that allows you to simultaneously set a predefined “limit price” and “stop price” for an asset you already hold. This allows for two opposite limit orders to be set in either direction of price.

A cover order consists of either a market or limit order placed along with a mandatory stop loss order within a specified range. The inherent risk is automatically reduced by placing the stop loss order simultaneously with the contract.

A stop limit order combines the features of a stop order and a limit order. When the stock hits a stop price that you set, it triggers a limit order. Then, the limit order is executed at your limit price or better.

Since stop-limit orders are only executed when specific price conditions are met, the market may move quickly, resulting in the order not being filled at the desired price. In fast-moving markets or during periods of extreme volatility, this can lead to missed trades and potential losses or forgone profits.

A limit order is an order to buy or sell a stock with a restriction on the maximum price to be paid (with a buy limit) or the minimum price to be received (with a sell limit). If the order is filled, it will only be at the specified limit price or better. However, there is no assurance of execution.

Yes, it is possible to place a stop-loss sell order right after a stop-limit buy order has been executed on Binance.

A stop-loss order allows you to specify the lowest price at which you want to sell your stocks while minimizing your losses. A limit sell order, on the other hand, permits you to set a good price for your stocks above which they can be sold. You can place these two orders on your stocks at the same time.

The primary benefit of a stop-limit order is that the trader has precise control over when the order should be filled. The downside, as with all limit orders, is that the trade is not guaranteed to be executed if the stock/commodity does not reach the stop price during the specified time period.

What is the best stop loss strategy? ›

Summary and conclusion - Stop-loss strategies work

The best trailing stop-loss percentage to use is either 15% or 20% If you use a pure momentum strategy a stop loss strategy can help you to completely avoid market crashes, and even earn you a small profit while the market loses 50%

A buy-stop order is a type of stop-loss order that protects short positions; it is set above the current market price and is triggered if the price rises above that level. Stop-limit orders are a type of stop-loss, but at the stop price, the order becomes a limit order—only executing at the limit price or better.

A stop-loss order is an order to trade an asset once it reaches a certain price. It's common in stock and options trading as part of a trader's exit strategy. You generally use this order type to limit losses or lock profits in. If you're trying to limit a loss, you'd set your stop-loss below the current price.

The answer to this question is yes since the market must trade through a limit order before a protective stop loss. A limit order is an order type that allows a trader to place a trade at a specific price and get filled at either that price or better depending on where the market trades first.

With an OCO order, both parts of the order are live in the marketplace at the same time. In some cases, due to market volatility, it is possible that both the stop and limit price can be executed.

Most traders use take-profit orders in conjunction with stop-loss orders (S/L) to manage their open positions. If the security rises to the take-profit point, the T/P order is executed and the position is closed for a gain.

The stop price and limit price don't have to be the same amount. The stop price you set triggers the execution of the order and is based on the price at which the stock was last traded. The limit price you set is the limit that sets price constraints on the trade and must be executed at that price or better.

The stop-limit order will be executed at a specified price, or better after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy or sell at the limit price or better. This type of order is an available option with nearly every online broker.

For example, a trigger price of ₹105 and a price of ₹105.10 can be set. When the trigger price of ₹105 is reached, a buy limit order is sent to the exchange, and the order is squared off at the next available offer below ₹105.10. Thus, the SL order may be executed at ₹105.05 or ₹105 but not above ₹105.10.