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January 08, 2021, 08:03:48 AM |
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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.
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