What is Sell Stop Limit order in Forex trading?
Now that we know what Buy Stop Limit is, it’s only natural to talk about its selling counterpart. The pending order called “Sell Stop Limit” combines Sell Stop and Sell Limit orders, and is currently only available on the MetaTrader 5 platform. This pending order type allows a trader to specify a price below the Current Price of the instrument they are is trading. That specified price below the Current Price is simply referred to as Price. If and when Price is reached, a Sell Limit order is automatically placed at a higher price level. This higher level is called the Stop Limit price.
In this context, the Sell Limit will be placed only if the Bid price reaches the Price. We are referring to it as Bid price, of course, because we are looking to sell. Once the Bid price rises up to the Stop Limit Price, the Sell Limit order is triggered and the position is opened. So, for example, say a trader was looking to sell EURUSD and the current price is 1.3050, he may decide to put the Price at 1.2950 because he believes it will reach that point. However because he believes that it will go up before continuing to decline, he places a Sell order with a Stop Limit Price at 1.3000.
The Sell Stop Limit is used by traders who anticipate that the price movement of their instrument will experience a temporary increase before it continues to decline.
