What are Stop Limit orders for?

If you trade in the metatrader 4 terminal, you have probably never heard of the fact that there are pending orders of the Stop Limit type.

In our work, we are more accustomed to using buy or sell stop and buy or sell limit; with them, everything looks as simple as possible.

Stop orders are placed above the price in an uptrend or below the price in a downtrend, and are opened after the price has passed the required distance.

Limit orders imply the presence of a correction in the market and are placed against the trend in the expectation that the price will roll back and then move in the desired direction. An example of setting a Buy limit.

Everything here is clear in principle, but why did buy and sell stop limit orders appear in metatrader 5, combining the names of the usual pending orders?

Let's look at their purpose using the example of a Buy Stop Limit order, which involves opening a pending buy transaction.

In fact, there is nothing complicated if you decompose this transaction into two orders; the first Buy Stop, after the price reaches its indicator, it is not the order itself that is placed, but permission is given to place a Buy Limit order:

For example: the current price is 1.08245 dollars per euro, we know that the support level is at 1.08900; most often the price makes a reversal and starts moving in the opposite direction here and set the value to “Price”.

We want our order to be triggered after the correction, it is assumed that it will end at 1.08500 and after that the price will go up again, here we insert the “Stop Limit Price” value. This will be the price at which the position will be opened:

It would seem that why such difficulties are needed, but this type of orders is mainly used when trading in a channel, when the Buy Stop Limit value is set at the lower border of this channel.

In this case, the stop loss below the Buy Stop Limit value, and the take profit, respectively, above the position opening point.

As for setting the Sell Stop Limit, it is set in the presence of a downward trend according to similar principles, the main rule is that the value of the “Price” field should be lower than the Stop Limit Price value.