Entry Limit Stock Orders: Buy Entry Limit and Sell Entry Limit

Limit order definition - Entry limit is an order to buy or sell a Stock at a certain stocks price which is a retracement level where stocks price is predicted to pullback to before resuming the original Stock trend. Stock traders use them to buy or sell at better market stock price. These types of orders are available in most online trading softwares, for our example we will use MetaTrader 4 stocks trading platform.

An entry of this type can be used to buy below the stocks market level (up stock trend market retracement) or sell above stocks market level (down stock trend stock market retracement).

Buy limit - When buying, your entry buy limit is executed when the stocks market falls to your set stock price. (retraces down)

Sell limit - When selling, your entry sell limit is executed when the stocks market rises to your set stock price. (retraces up)

Entry orders are placed by stock traders when they expect stocks price to bounce back after reaching this level.

• Entry Buy Limit Stock Orderbuy at a level below the current market level.

• Entry Sell Limit Stock Ordersell at a level above the current market level.

Buy Entry Limit Example

In the stocks examples illustrated & described below, the buy limit stock order was placed to buy at a stock price below the current market stock price. Point B is the point at which it was set.

Limit buy order entry placed to buy below the current market stock price

The stocks price then retraced and went down to hit the buy entry limit, and afterwards stocks price continued to move upwards in direction of the original Stock upward stocks trend. When limit buy order was hit it changed in to a buy.

Stock Price hits buy limit, order now changes to a buy

Sell Entry Limit Stocks Order

In the stocks trading example illustrated and explained below a the sell entry limit was placed to sell at a stock price above the current market stock price. This is the level for the stocks price retracement.

Entry limit sell order placed to sell above current market stock price

The stocks price then rallied, went up to hit the sell entry limit, and afterwards stocks price continued to move downwards in direction of the original Stocks downward trend.

Stock Price hits sell limit, order now changes to a sell

When stock trading quote got to the set level the order changed in to a sell, this is therefore a nice technique to buy or sell at a better stocks price after a retracement.

Setting Buy and Sell Limit Stocks Orders on MT4 Platform

To set up these stock orders in MT4 platform, Right Click on Stock chart>>> Choose "Trading">>> Then Select "New">>> Then on the pop up window panel that pops up (illustrated below), under label "Type" select the option of "pending" instead of "market execution">>> Under the pending stocks order options select the pending stocks order type: For This trade choose either 'Buy Limit Stock Order" or "Sell Limit Stock Order" depending on whether you want to place a pending buy or sell.

Setting Buy and Sell Limit Stock Orders in MetaTrader 4 Platform

Sometimes, setting the point value to place your trade can be tricky, setting to far might mean your entry market limit not getting executed, the best tool to use is Fibonacci retracement indicator and use the 38.2 % retracement levels. This retracement level is watched by many stock traders and entry orders tend to crowd at this level, therefore the best odds to catch a trade would be presented by using the 38.2% Fibonacci retracement level.

Fibonacci Retracement Tutorial - Stock Fib Retracement Guide

Tip: In Stock online trading, If you want to set a good take profit level (not retracement level, take profit level) for your trades you can use the Fibonacci expansion 100% level for the best take profit area. To Read more on Stock Trading Fibo Retracement and Fibo expansion use the right navigation menu section Technical Analysis.

Stock Trading Fibonacci Expansion Tool Tutorial - Stock Fibonacci Expansion Tool Tutorial