STOP LOSS VS STOP LIMIT ORDER DIFFERENCES. Straight to the Point #STTP #59
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4 سال پیش
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In around two minutes you
In around two minutes you will know what is the difference between a Stop Loss and a Stop Limit orders. You will get both professional definition and easy explanation. No intro, no outro, straight to the point.
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The difference between Stop Loss Order and Stop Limit Order is what these orders become as soon as stop price is triggered.
Both stop loss and stop limit orders are stop orders in their nature. Which basically means, as soon as stop price is reached, these orders will be triggered to turn into market and limit orders respectively.
And if you are not sure what market, limit, or stop orders are, fell free to watch my previous videos where I talk about them.
To make it visually easier, let’s use this table to show the differences between stop loss and stop limit orders.
So, the first and the main difference is that as soon as stop price is reached, stop loss order becomes market order and stop limit order becomes limit order.
The second difference is that while setting up a stop loss order, you only need to select one price. Which is stop price. And while setting up a stop limit order, you need to select two prices. The first one is stop price, which triggers the order. And the second is limit price at which order can be executed.
The third difference is that stop loss order might be more suitable for highly liquid shares. Because as soon as such order is triggered and becomes market order, high liquidity allows to buy or sell shares almost immediately at current prices.
While stop limit order might be better for lower liquidity shares. Once such order is triggered it becomes a limit order. Which guarantees you better prices in case they go up or down rapidly, which won’t be able to be captured using regular market order.
And finally, the fourth and the last difference at least in my own opinion is the difference in mindsets and approaches of traders who use these orders.
Traders who use stop loss orders are willing to exit their positions and limit their losses because they don’t believe that the situation might get better in the nearest future.
While traders who use stop limit orders still have hope in a company after things go south quick.
Exiting the position using stop loss order is always guaranteed. But if you use stop limit order, your position might still end up being open.
If you find my content interesting, please consider subscribing to my channel. It helps a lot as a beginner creator. And let me know if there is anything you would like to know about personal finances and investing.
► Get 2 FREE stocks up to $4500 with Wealthsimple: https://bit.ly/3kzztaD
► My 188 Companies Watchlist: https://bit.ly/3cbWL3f
► Book FREE 15 Minutes Call "The Power of Investments": https://bit.ly/3kvL36C
► Download my FREE eBook about Investments: https://bit.ly/2FL2UHI
► Follow Me On Instagram: Instagram: artemdkrv
The difference between Stop Loss Order and Stop Limit Order is what these orders become as soon as stop price is triggered.
Both stop loss and stop limit orders are stop orders in their nature. Which basically means, as soon as stop price is reached, these orders will be triggered to turn into market and limit orders respectively.
And if you are not sure what market, limit, or stop orders are, fell free to watch my previous videos where I talk about them.
To make it visually easier, let’s use this table to show the differences between stop loss and stop limit orders.
So, the first and the main difference is that as soon as stop price is reached, stop loss order becomes market order and stop limit order becomes limit order.
The second difference is that while setting up a stop loss order, you only need to select one price. Which is stop price. And while setting up a stop limit order, you need to select two prices. The first one is stop price, which triggers the order. And the second is limit price at which order can be executed.
The third difference is that stop loss order might be more suitable for highly liquid shares. Because as soon as such order is triggered and becomes market order, high liquidity allows to buy or sell shares almost immediately at current prices.
While stop limit order might be better for lower liquidity shares. Once such order is triggered it becomes a limit order. Which guarantees you better prices in case they go up or down rapidly, which won’t be able to be captured using regular market order.
And finally, the fourth and the last difference at least in my own opinion is the difference in mindsets and approaches of traders who use these orders.
Traders who use stop loss orders are willing to exit their positions and limit their losses because they don’t believe that the situation might get better in the nearest future.
While traders who use stop limit orders still have hope in a company after things go south quick.
Exiting the position using stop loss order is always guaranteed. But if you use stop limit order, your position might still end up being open.
If you find my content interesting, please consider subscribing to my channel. It helps a lot as a beginner creator. And let me know if there is anything you would like to know about personal finances and investing.
4 سال پیش
در تاریخ 1399/09/08 منتشر شده
است.
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