Buy Stop Order & Sell Stop
These are orders to buy above the market price or sell below market price
Buy StopAn order to buy at a level above current market price
Sell Stop An order to sell at a level below the prevailing market price
Buy Stop Order and Sell Stop
These stop orders are used by traders who want to trade a setup like the consolidation pattern, but they do not want to wait all day watching the market prices of Gold until there is a price break out. Hence, these traders will use these orders to set pending orders above and below the consolidating prices & a price breakout in any of the direction will execute one of these pending orders and a buy trade or a sell trade will automatically be opened.
Buy Stop
An example of a buy stop order is shown below.
In the example a buy stop pending was placed to buy at a level above the prevailing market price.
The price then moved up to hit the buy stop order, & afterwards price continued to move upward.
Placing a Buy StopOrder above a Resistance Level
Placing a Buy Stopabove a Price Consolidation
A buy was generated from the above stop order setups, when price broke a resistance area in the first example and when there was an upwards breakout of prices after the price consolidation chart pattern in the second example.
Sell Stop
An example of a sell stop order is shown below.
In the example a sell stop order was placed to sell at a level below current price.
The price then moved down to hit the sell stop order, & afterwards price continued to move downwards.
Placing a Sell Stopbelow a Resistance Level
Placing a Sell StopOrder below a Price Consolidation
A sell was generated from the above stop order set-ups, when price broke a support level in the first example and when there was a downwards breakout of prices after the price consolidation chart pattern in the second example.
How to differentiate between stop orders and limit orders
It's easier to first of all remember one concept. The easier concept is that of Stop Orders - stop orders are set above & below the market price.
Setting Buy and Sell Stop Orders on MetaTrader4 Platform Software
Open a Gold Trading Chart, Right Click on the Chart, Select New Order, & then follow the steps below:
Step 1: Choose Pending order as shown belowStep 2: Select Pending Order Menu as Show belowStep 3: Select Buy Stop or Sell Stop Step 4: Click "Place" Order
Steps to Setting Buy Stop or Sell Stop Orders in MetaTrader 4 Software
Study More Lessons and Courses:
- How Can You Draw Fibonacci Pullback Trading Indicator on XAU/USD Charts?
- Drawing Downwards Trend Lines & Channels on XAU/USD Charts
- How to Add a Gold Symbol on MetaTrader 5 Platform
- Trade Gold Patterns
- How Can You Draw Downwards XAUUSD Channel on MetaTrader 4 Chart?
- MetaTrader 5 Trading Software iPhone Trading App Tutorial Guide
- When Not to Trade Gold
- About XAU/USD
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- Moving Average MA Envelopes XAUUSD Indicator
