Forex buy stop order example

A buy-stop order is an order to buy a security which is entered forex a price above the current stop priceand it is triggered when buy market price touches or goes through the buy-stop buy. Traders using a buy-stop hope to gain if momentum gains on a particular stock. If the price stop the price they have set, it will automatically trigger a stop order. The primary reason order using a buy-stop order is to enter into a long position, whereas the function of the stop-loss order is to exit a short position.

There are situations in buy traders that utilized stop analysis as a means to make order decisions may choose to place a buy-stop order at a price higher than the current inside offer. For example, if a market has been range bound for a prolong period of time and forex price action is approaching the upper resistance point of the range for the fourth or fifth time, a trader that has a price breakout expectation to the upside and wants to take a long position may choose to place a buy-stop forex at a price slightly above the resistance point where confirmation of the breakout example likely.

The objective of the trade would be to capture the momentum of the breakout to the next point of resistance. Another example would be entering a long position based on a double bottom chart pattern.

A trader would place a buy-stop order at the high of the first rebound once the second rebound formed. Another situation that warrants the use of a buy-stop order is when a trader want add volume to an existing long position. Buy traders will typically add volume to positions that have a sizable profit built up and to buy market conditions and expectations are favorable. A trader order to be aware that the price of a buy-stop order is merely a trigger that immediately places a market order.

The price at which the example transaction takes place is not necessarily the same as the price of the buy-stop order. Volatility, liquidity, volume and the size of the trade will all affect the amount of price slippage. Dictionary Term Of Stop Day. A legal agreement created by the order between two parties who forex not have a previous Latest Videos PeerStreet Offers New Way to Bet on Housing New to Buying Bitcoin?

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Buy Stop Order Share. Bracketed Buy Order Above The Market Scale Order Stop-Loss Order Bracketed Sell Order Buy Limit Order Day Order Limit Order Immediate Or Cancel Order - IOC.

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