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What is Stop-Limit order?
A stop-limit order is a form of limit order that allows traders to protect their profits as well as limit losses, reducing the risks associated with erratic market movements. To create a stop-limit order, you’ll need to first choose the stop price, limit price, and order volume.
- Stop Price: The price at which your limit order will be triggered and entered into the order book.
- Limit Price: Your order will be placed in the order book at the limit price.
When the market reaches or goes through the Stop Price, a Limit Order will be placed at the Limit Price.
How to place a Stop-Limit order?
- Click on the drop-down list in the Buy/Sell Form.
- Select Stop Limit.
- Enter your Stop price.
- Enter your Limit price.
- Enter the amount of crypto you’re looking to buy. You can also use the % buttons to automatically fill the amount.
- Click on the Buy button.
- The Stop Price and Limit Price can be the same. However, we recommend the following:
- For Sell Orders: Set the Stop Price higher than the Limit Price. This will increase the likelihood of your Sell Limit Order being executed. In case the liquidity in the Order Book is low or the market goes through too fast.
- For Buy Orders: Set the Stop Price lower than the Limit Price. This will increase the likelihood of your Buy Limit Order being executed. In case the liquidity in the Order Book is low or the market goes through too fast.
- Triggering the Stop Price and placing the Limit Order does not guarantee that your order will be fully filled or executed. Sometimes, the liquidity may be low at your Limit Price or the market may go through your limit price too fast. In these cases, your Limit Order will remain fully or partially open in the Order Book.
- Sometimes, while the Stop Price may be triggered, the market may not reach your Limit Price. In this case, too, your Limit Order will remain fully or partially open in the Order Book.
- Example (Buy): Let’s say you want to buy LTC when the market price reaches $50, but don’t want to buy above $52. Set a Stop Limit order with a Stop Price of $50 and a Limit Price of $52. When the market reaches $50, your Buy Limit Order for $52 will be automatically placed in the Order Book and matched to the best available sell orders up to $52.
- Example (Sell): Let’s say you want to sell LTC when the market price reaches $70, and sell everything within $65. Set a Stop Limit order with a Stop Price of $70 and a Limit Price of $65. When the market reaches $70, your Sell Limit Order for $65 will be automatically placed in the Order Book and matched to the best available Buy orders up to $65.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn’t represent any investment advice or WazirX’s official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.