A stop loss limit order, or stop limit order, is a type of advanced trading order that combines the best of stop loss and limit orders in one and the same trading order.
First of all, we have in this type of order, a stop price. This value serves as a marker to activate an attached limit order. This limit order, in turn, is accompanied by a specific limit price for the limit order to be executed. In other words more clearly: a stop loss limit order is a double conditional order. Its first conditional is a price that triggers our limit order, which will have a specified price to be executed.
This type of order is very useful at times when the market fluctuates a lot, and we want to anticipate actions that allow us to sell or buy a certain cryptocurrency at a certain price according to our judgment and market analysis.
When to use a stop loss limit order?
Stop loss limit orders are especially useful for risk management in our trading operations. That is, they are useful to avoid losses in our balance sheet, or to take advantage of good buying opportunities.
These types of orders reveal their full potential when they are used with a correct analysis of resistance and support, as well as trend analysis. This is thanks to the fact that this type of analysis will be able to tell you which are the best points to place stop loss values.
Thus, by placing a good trigger point, you will be able to decide what limit order value you want to execute your trading operation, keeping a good risk management in the same.
How to use this order in Atani?
To use a stop loss limit order in Atani, you must first verify that you have connected an exchange. In this case, all of the supported exchanges offer the ability to execute this type of orders from Atani.
Knowing this, to use the stop loss limit order in Atani, you must go to the trading form and select the “Stop Limit” tab, as shown below.
There you will see the following fields:
- Stop, is the activation value of the order. It is a flag or marker, which is used to activate our limit order. To set this value, it is recommended to study the trend, support and resistance of an asset’s value. Thus, you will be able to choose a stop value according to your trading strategy and to minimize your risks.
- Limit, is the value that will trigger the limit order that we will create. Once the stop price we have set is reached by the price of the asset, the system will create this limit order and write it down in the exchange’s order book. It is recommended to follow these indications to place this value:
- A little higher than the stop value, in case you want to sell your assets.
- Slightly lower than the stop value, in case we want to buy more assets.
- You can place the value at the same value as the stop, but you lose the flexibility of the order (acts as a normal limit order).
- Total is the amount of money we will use from our balance sheet to make the purchase.
Example using this order
As an example, let’s choose the MATIC/USD cryptocurrency pair in Coinbase Pro. To choose the pair, you must select the MATIC currency using the panel located on the left side of the application.
Once you have chosen the pair you will see the MATIC/USD cryptocurrency pair chart on your screen. Here all you have to do is to fill in the described fields with the values we want. After that you can click on the “Sell” button.
After this procedure we can check that our transaction has been sent and carried out. We only have to wait for the conditions to be fulfilled and the operation to be completed.
On the other hand, in case you want to make a buy, you only need to follow the recommendation given. You must configure the values in the correct way to be able to execute the stop loss limit order.
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