What are the differences between limit order and stop limit order in the context of cryptocurrency trading on Robinhood?

3 answers

• Dec 30, 2021 · 3 years ago
  A limit order is an instruction to buy or sell a cryptocurrency at a specific price or better. When you place a limit order, you set the maximum price you are willing to pay as a buyer or the minimum price you are willing to accept as a seller. The order will only be executed if the market price reaches or exceeds your specified limit price. This type of order allows you to have more control over the price at which you buy or sell, but there is no guarantee that the order will be filled if the market price does not reach your limit. A stop limit order, on the other hand, combines elements of a stop order and a limit order. It involves setting a stop price and a limit price. When the stop price is reached, the order is triggered and becomes a limit order. The limit order will then be executed at the limit price or better. This type of order is useful for traders who want to enter or exit a position at a specific price level, but it also carries the risk of the order not being filled if the market price does not reach the stop price. In summary, a limit order allows you to set the maximum price you are willing to pay or the minimum price you are willing to accept, while a stop limit order combines a stop order and a limit order to trigger a limit order at a specific price level. Both types of orders have their advantages and disadvantages, so it's important to understand how they work and choose the one that best suits your trading strategy.
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• Dec 30, 2021 · 3 years ago
  Alright, let's break it down. A limit order is like setting a price threshold for your trade. You specify the maximum price you're willing to pay as a buyer or the minimum price you're willing to accept as a seller. If the market price reaches or exceeds your limit, your order gets executed. It's a way to have more control over the price, but there's no guarantee that your order will be filled if the market doesn't reach your limit. Now, a stop limit order is a bit different. It's like combining a stop order and a limit order. You set a stop price and a limit price. When the stop price is reached, your order is triggered and becomes a limit order. Then, it will be executed at the limit price or better. This type of order is useful if you want to enter or exit a position at a specific price level, but there's a risk that your order won't be filled if the market doesn't reach the stop price. To sum it up, a limit order lets you set a maximum buying price or a minimum selling price, while a stop limit order triggers a limit order at a specific price level. Each has its pros and cons, so choose wisely based on your trading strategy.
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• Dec 30, 2021 · 3 years ago
  When it comes to trading cryptocurrencies on Robinhood, it's important to understand the differences between a limit order and a stop limit order. A limit order allows you to set the maximum price you're willing to pay as a buyer or the minimum price you're willing to accept as a seller. This gives you more control over the price at which you buy or sell, but there's no guarantee that your order will be filled if the market price doesn't reach your limit. On the other hand, a stop limit order combines elements of a stop order and a limit order. You set a stop price and a limit price. When the stop price is reached, your order is triggered and becomes a limit order. It will then be executed at the limit price or better. This type of order is useful if you want to enter or exit a position at a specific price level, but there's a risk that your order won't be filled if the market price doesn't reach the stop price. In conclusion, a limit order allows for more control over the price, while a stop limit order combines a stop order and a limit order to trigger a limit order at a specific price level. Both have their advantages and disadvantages, so it's important to consider your trading strategy before choosing which type of order to use.
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