Order by limit.

When placing a new, pending buy order in a trader's trading terminal, you are always faced with the question of what type of order should you choose? – buy stop or buy limit.

Order by limit - allows you to purchase a currency below the current Forex price level, that is, placing this order at first glance does not look logical, but this action implies the use of a special trading strategy, which we will discuss below.

In order to place a pending buy limit order, you need to perform several simple steps:

• Click on the “New Order” tab or on F9 when the trader’s terminal is running.

• Set the trading volume and select the currency pair for which the transaction will be made.

• Operation type – set “Pending order”, after which an extended menu will open in which we select by limit.

• The execution price is the most interesting and unusual point; here you should set a price lower than the existing one, otherwise the order simply will not be executed and you will receive a refusal to place it.

• Setting stop orders - after setting the trigger price, we must set the stop loss and take profit order indicators.

Ignoring these orders usually leads to the loss of the deposit. In this case, the stop loss is set below the order trigger level, and the take profit is correspondingly higher.

If you want to limit the action of your order by time, we also set the parameters of the “Expiration” indicator, the date and time after which the buy limit order will cease to exist if it is not executed.

Strategy using a buy limit pending order.

Trading using a by limit order is based on the strategy of trading in a price channel or on a correction, which implies a certain pattern of price movement.

Which carries out its movement between the support and resistance lines, pushing off from one of them and making a reversal in the opposite direction. In our case, the main reference point is the support line and a pending order should be placed near it, counting on a trend reversal towards an increase in the rate of the currency pair on Forex.

The main rule for using this strategy is the presence of an uptrend; trading is carried out on so-called price pullbacks with pending orders triggered at the lower points of this movement.

The buy limit allows you to take the maximum profit from the existing trend movement, but it should be taken into account that in case of an error and incorrect forecast, this operation can lead to losses.