Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What is Sell Stop Limit? Trading Basics

Forex Educational Video Series

Author: Andreas Thalassinos (BSc, MSc, MSTA, CFTe, MFTA), Head of Education at FXTM.

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.

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.

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