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Title: Why does a stop limit order have two prices? Did I do this right? Post by: beamin on January 08, 2021, 06:31:00 AM I noticed that the stop limit order has a stop price and a limit price. Wouldnt you want them to be the same thing?
If I bought 1000$ of BTC at 10,000$/BTC and I was worried about losing money wouldnt I set both number to 10,000? That way when the price drops to 10,000 it automatically puts out an order and it sells. The only reason I can think of that you would put different prices is if you were selling hundreds of coins and there might not be a buyer for such a big order, but a little order like $1000 would execute almost instantly. I just bought some eth and I set a limit order $1 below since I bought at what I'm realizing was close to the ATH and I dont want to lose, not exspecting to make any money off it: Stop @ 1001.00 0.81227114 ETH 0.00000000 999.00 0.00 active Is this the proper way to do a limit order or did I mix up the numbers? Title: Re: Why does a stop limit order have two prices? Did I do this right? Post by: Maus0728 on January 08, 2021, 08:03:48 AM Stop Limit Order is basically an upgraded version of a Limit Order and the easiest way to understand the concept is to break it down to two separate order.
Stop price which triggers the limit order and Limit price which is technically the standard limit order. Let's say for example that if the price of BTC is at 38,880 USDT and it is about to breakout. In order to take advantage of the bullish trend, you can perhaps use the Stop-Limit Order to control how much price you are willing to pay to but BTC. With the said, your Stop Price could be 38,880 and your Limit Price is 38,900 which is the maximum price you are willing to buy BTC. Therefore if the market price triggers the stop price; your order will now become active and is waiting to be filled at the Limit Price of 38,900 USDT. As far as I know, type of order is being used for confirmation. Title: Re: Why does a stop limit order have two prices? Did I do this right? Post by: actmyname on January 08, 2021, 12:45:18 PM Imagine a scenario where the price is flash crashing, dropping way past your stop price.
If your limit price is still set at your stop price, you are not aptly prepared for any volatile spread. Where the price might have dropped from (arbitrary number) 12K to 8K, if your stop/limit was still around 10K it might never be filled. Volatile markets will destroy unprepared stop-limit orders. You can effectively view the range between the stop and limit as the spread that you're going to be trading for the specific order. Title: Re: Why does a stop limit order have two prices? Did I do this right? Post by: hd49728 on January 08, 2021, 02:33:56 PM Binance Academy has a guide and a screenshot of message when you set up your Stop price and your Stop limit order. You imagine when horribly crash occurs, many layers of triggers will be hit, then price has a cascade-effect and it is very terrible.
The crash in March 2020 is something like that. What Is a Stop-Limit Order? (https://academy.binance.com/en/articles/what-is-a-stop-limit-order) Types of Order (https://www.binance.com/en/support/articles/360033779452-Types-of-Order) https://academy.binance.com/_next/image?url=https%3A%2F%2Fimage.binance.vision%2Feditor-uploads%252F1549609534853-1549609534853.jpeg&w=1920&q=75 One of the Best Weapons in Trading (https://bitcointalk.org/index.php?topic=5173189.msg52086364#msg52086364) |
