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.