A Stop Limit order is a type of order that is designed to help you buy breakouts, limit your losses, or take profits.
To place a Stop Limit order, you need to specify two prices: a Stop Price and a Limit Price.
Stop Price is the price at which your order will become executable
Limit Price is the highest price you are willing to pay (if you're buying) or the lowest price you are willing to sell (if you're selling).
Buy Stop Limit
Once the stock price reaches the Stop Price you've set, a Limit Order is automatically sent to PSE.
The Stop Limit order ensures that you will only be executed at a price that is at or below the Limit Price you've set. This means that you won't pay more than the Limit Price for the stock.
Example:
Stop Limit to Buy a Break Out
Buy a breakout by entering a buy stop at 236.2 and a limit price at 237. When the stock price hits 236.2, the system will automatically send a buy limit order at 237.
Sell Stop Limit
Once the stock price reaches the Stop Price you've set, a Limit Order is automatically sent to PSE.
The Stop Limit order ensures that you will only be executed at a price that is at or above the Limit Price you've set. This means that you won't sell the stock for less than the Limit Price.
Example:
Stop Limit to Cut Loss
Limit potenital losses by selling the stock in the event the stock breaks a crucial support level. Enter a sell stop at 224.0 with a limit at 223.0
Stop Limit to Take Profit
Protect your profit by selling the break of the trendline. Enter a sell stop at 251 with a limit price at 250.
In summary, a Stop Limit order allows you to set a Stop Price to trigger your order, and a Limit Price to control the price at which the order will be executed. This can help you manage your risk and make more informed trading decisions.