Thread: Why there is difference between buy limit and buy stop?

Originally Posted by ;

I asked this question once myself. Think of it like this (I have it printed out and recorded my previous screen )

Pending Orders

Buy Stop = Moving LONG once price comes UP to hit on the entrance
Buy Limit = Moving LONG once price comes DOWN to hit on the entry price
Sell Stop = Moving SHORT when price comes DOWN to hit on the entrance
Sell Limit = Moving SHORT when price comes UP to hit on the entry price

clear and into the point.thanks

Originally Posted by ;

quote clear and into the point.thanks

yup. . Very straight to the stage. Take 1 sec to know it

Now you know the buy limit is below and the buy stop is above, the reason they do not have the exact same title is because they serve different purpose whatsoever.

This is a very useless thread. BS and BL create sense, if a person wishes to understand the difference btw.

But this thread is about why two distinct names for two distinct concepts.

Originally Posted by ;

That is a really useless thread. If a person wants to understand the difference btw BL and BS make sense. But this thread is about why two distinct names for two distinct theories.

don't say like this. This is a great of thread especially for newbies who doesn't now it

Originally Posted by ;

quote do not say like that. This is a great of thread especially for newbies who does not now it

Yup, it maybe hard for many newbie to comprehend that, though we think that it's a frequent sense.
I believe we can think from the origin of the two concept, which would assist us to comprehend them.

Originally Posted by ;

quote Yeah, it maybe difficult for most newbie to understand that, though we think it's a frequent sense. I believe we can think from the origin of both concept, which would help us to understand them.

Agree mate.

Also, Stops are often utilized to exit a transaction (ie StopLOSS).
Limits are used to TakePROFIT.

Originally Posted by ;

quote With buy limit you can acquire positive slippage. With buy stop you can acquire unwanted slippage. Favorable slippage means you might find a cheaper price once the buy limit is implemented hence possibly more profit For sell limit positive slippage means you get higher/expensive price when market limit becomes implemented hence more profit. Negative slippage means that you might find an expensive price once the buy stop is implemented hence you might have less profit or possibly major reduction. Sell stop unwanted slippage means you get lower price when market stop...

Another thing
Cease order is prone to gap. For instance buy stop, when there's gap to the upside down, you will find a bad price or higher price for your order

However, for buy limit, it won't be implemented when there's a gap to the upside. However for sell limit, when there's gap to the upside down, the order will be implemented with higher price consequently more profit particularly when the market decrease from the high gap.

For more accurate executed order, you should use limit order. You will often get the perfect price or greater price for your order.

Let say you wish to buy at a previous candle high.
Assuming that the price went above the former candle high.
You set buy limit order hoping the market will touch it before it continues its momentum to the upside. But if it does not touches the buy limit order then you definitely missed the opportunity to the upside

But if it touches instead in the next few seconds but in the next few hours or days, this can be dangerous because it could indie that the market is moving down or bearish instead up (bullish).