Limit Entry Orders: Buy Entry Limit & Sell Entry Limit
Limit order definition - Entry limit order is an order to buy or sell a Gold at a certain gold trading price which is a pull back area where the price is predicted to retrace to before resuming the original trend. Traders use them to buy/sell at a better price. These types of trade orders are available in most of the online softwares, for our examples we will use MetaTrader 4 platform.
An entry of this type can be used to open buy below the market level (up trend market pull-back) or sell above the market level (down trend market pull-back).
Buy limit - When buying, your entry buy limit pending order is executed when market falls to your set xauusd trading price. ( price retraces downward )
Sell limit - When selling, your entry sell limit pending order is executed when market rises to price that you set. ( price retraces up )
Entry orders are placed by traders when they expect xauusd trading price to bounce back after getting to this level.
- Entry Buy Limitbuy at a point below ruling market level.
- Entry Sell Limitsell at a price point above ruling market level.
Buy Entry Limit Order Example
In the illustrations shown and described below, the buy limit order was placed to open buy at trading price below the prevailing market trading price. Point B is point that it was set.
Limit buy order entry placed to open a buy below the current market trading price
The price then retraced and went down to hit the buy entry limit, and afterwards the price continued to move upward in direction of the initial Gold upwards trend. When the limit buy order was hit by price it changed into a buy.
Price hits buy limit, order now changes to a buy
Sell Entry Limit Order
In the illustration shown & described below a sell entry limit was set to sell at a point above the prevailing market price. This is the level for the price retracement.
Entry limit sell pending order placed to open a sell above current market trading price
The market price then rallied, headed upward to hit sell entry limit, and afterwards trading price continued to move downwards in direction of the initial downwards trend.
Price hits sell limit, order now changes to a sell
When gold quote got to the set level the order changed into a sell, this is therefore a nice technique to buy or sell at a better price after a price retracement.
Setting Buy & Sell Limit Orders on MT4 Platform Software
To set up these orders on MT4 software, Right-Click on chart>>> Select "Trading">>> Then Choose & Select "New">>> Then on the pop-up window that pops up (portrayed below), under label "Type" select and choose the choice/option of the "pending" instead of the "market execution">>> Under the pending order options select the pending order type: for This trade select either "Buy Limit" or "Sell Limit " depending on whether you as a trader want to place a pending sell or buy.
Putting Buy & Sell Limit Orders on MT4 Platform Software
Sometimes, setting the point value where to place your trade position can be tricky, setting to far may mean your entry limit order not getting executed, the best tool to use is Fibo retracement trading indicator & use the 38.20 % retracement levels. This retracement level is watched by many traders and entry orders tend to congregate at this technical level, therefore the best odds to catch a trade position would be presented by using the 38.2% Fibonacci retracement.
Fibonacci Retracement Tutorial Guide - Fibonacci Retracement Tutorial Guide
Tip: in Gold online trading, If you as a trader want to set a good take profit order level (not retracement level, takeprofit level) for your positions you as a trader can use the Fibonacci extension 100% level for the best tp order area. To Read more on Gold Fibo Retracement and Fibo expansion use the right navigation menu section Technical Analysis.
Fibonacci Expansion Tool Lesson - Fibonacci Expansion Tool Tutorial
Get More Courses:
- XAU/USD Platform Software MT4 Market Watch Window Panel for MT4 Quotes List
- How to Draw Trend line in Trade Charts in MT4 Trade Platform
- How to Set MetaTrader 5 MA(Moving Average) Envelope Trading Indicator in Gold Chart
- MT4 XAU/USD Charts Tutorial Lesson
- Best Linear Weighted Moving Average(MA) for 1H XAU/USD Chart
- How to Open Gold Practice Account in MT5 Software
- Fibonacci Drawing on XAUUSD Charts Exercises
