Buy stop and sell stop orders
What is a buy stop?
Buy stop limits are perfect when you’re anticipating the overall direction of an asset’s value. Say that you wanted to buy CFDs in Tesla stock at CAPEX. The stock was currently trading at a market price of $650, but you thought that it would keep rising.
This is where you might want to put down a buy stop order at $660. As such, you’ll know that your trading software only bought Tesla stock once the market price was affordable.
Times to use a sell stop order
Sell stop orders will initiate a short trade when the value of an asset is below the current price. So if you came to CAPEX and wanted to trade the CFD for an index like the S&P 500, you could set a sell stop order that would make sure that the sale never went ahead once the market price had dipped below a certain level. All of which would ensure that each short trade you made gave you a decent return on your investment.
You can learn more by reading our article on “buy limit vs. buy stop.”
Conclusion – Start using pending orders at CAPEX
Pending orders are a wonderful way to save time when trading. You can simply set up your pending order and let it do its work safe in the knowledge that you won’t miss a certain sale or purchase. Plus the way that pending orders work means that you won’t have to deal with slippage suffered when you sometimes make standard market orders.
As long as you factor in the risk that’s common to all trading as well as the fact that pending orders sometimes miss decent value trades, then you’ll find pending orders to be essential parts of online trading. So make sure that you sign up to CAPEX and let our pending orders do the hard work for you!