Buy limit.

Working with pending orders has always brought good profits, but in order to correctly use this trading tool, you should know the types of pending orders. One of these types is a buy limit order.

Buy limit – represents an order to buy below the current price level. That is, you give an order to buy a currency after the price drops to a certain value.

The assumption is that the buy position will be opened after the so-called trend correction has occurred, and the price of the currency pair will begin to rise again, generating the planned profit. The essence of this operation is somewhat complex, so let's examine it in detail.

Example of placing a buy limit order.

At 4:00 PM, the currency pair is at 1.3463 and gradually declining. Let's target 1.3440, and place our buy limit order there. If our assumptions are correct, the price will rise again at this point.

Also, don't forget to set a stop-loss and take-profit, setting the latter to 15 pips.

The figure shows how the rate dropped to the pending order trigger at 4:30 PM, after which the price moved a little further in the same direction and began to rise. At 5:00 PM, our take-profit order is triggered, and the trade closes with a profit of 15 pips.

Here's an example of how to place a pending buy limit order.

Typically, a longer timeframe than M30 is used to place this type of order, but in addition to increasing potential profits, there's also the risk of miscalculating the price reversal.

This tactic is used when the correction size can be calculated in advance and the direction of the main trend on a higher timeframe is known. Orders are placed during a pullback on shorter timeframes.

One of the key conditions for successful trading with this order is correctly identifying the reversal point and setting stop orders.
A small stop-loss will trigger it early, while a large take-profit may prevent profits before the next correction.

The trader's terminal often has a minimum value for this order; it typically can't be placed closer than 10-15 pips from the current price, so be careful when placing it.

Trading with buy limits is quite complex, so it's easier to use pending orders like buy stops .