Hello, new here. I have a question regarding using limit orders, specifically with Kraken. What I want to do is sell an asset at a certain price, then set an order to buy it back at a higher price than I sold it, essentially like a stop loss for a short position but without actually entering a margin short.

I think I've been able to set stop loss orders for actual margin short positions by using just a Stop Loss Limit Buy order and it works, but it seems like I'm not doing it in a cost effective way even for that. I also wonder if this is the best way to go about this when I'm not in a margin position but simply want to buy back the asset with cash if it drifts up past a certain point.

Kraken offers regular limit buy and sell orders, Stop Loss and Take Profit orders, and Stop Loss (Stop) and Take Profit (Stop) both buy and sell orders.

To recap what I want to do here: Let's say I'm long a couple hundred XTZ and the price is at say 3.05. I think it's going to continue to drift downward short term so I sell half my holdings at 3.05 with hopes to buy it back later at a lower price. However, I don't want to risk missing out if there's an upward trend reversal. Therefore, I want to put in an order to buy back the XTZ I sold at say, 3.08 to 3.10. Would I use a Stop Loss (Stop) Limit order for this?

Note that I'm only going to do this when the market is exhibiting certain low volatility drift tendencies and with other technical signals. I do recognize that this isn't the best strategy to use in many situations. Also, I don't trade XTZ and the price targets are just for the sake of example.

I hope this makes sense and thanks for any advice in advance.. I don't know where else to turn for this question!