What is Stop Limit, and how is it different from a regular Limit Order?
- A Stop Limit Order is different from a regular Limit Order in that a Limit Order is immediately placed into the Order Book once the order is submitted. In contrast, a Stop Limit Order will not be placed immediately. The system will wait until the market price reaches the specified Stop Price. Once the Stop Price is reached, the system will place a Limit Order into the system according to the Limit Price set by the user.
In simple terms, Stop Limit means the system waits until the price reaches the specified level before placing a Limit Order into the market.
What is the difference between Stop Price and Quick Price?
- Quick Price refers to the actual market trading price of the asset at that moment, which constantly changes according to market supply and demand.
- Stop Price refers to the price set in advance by the user as a condition for the order to become active. The system will not place any buy or sell order until the market price reaches the specified Stop Price.
In simple terms, Quick Price is the current market price, while Stop Price is the price level set by the user to trigger the order.
What are the possible ways to set Stop Orders for buying and selling?
For BUY orders, there are several possible settings, including:
- When the Stop Price is higher than the Limit Price, this is generally used when the user wants the system to activate the order after the price rises to a specified level, and then wait to buy at a price lower than the Stop Price. For example, the user may want to wait for the price to break through a certain level to confirm the trend, but still does not want to buy at a price that is too high.
- When the Stop Price is lower than the Limit Price, this is generally used when the user wants to buy after the asset price breaks above a resistance level and is willing to buy at a price higher than the Stop Price in order to increase the chance of the order being matched.
For SELL orders, there are also several possible settings, including:
- When the Stop Price is higher than the Limit Price, this is generally used when the user wants to take profit or sell when the price rises to a specified level. The system will place the sell order according to the Limit Price set by the user.
- When the Stop Price is lower than the Limit Price, this is generally used when the user wants to sell when the price falls to a specified level, such as setting a Stop Loss to help limit the risk of loss.
In simple terms, Stop Price is the trigger point for the order to become active, while Limit Price is the acceptable buy or sell price set by the user.
How does a Stop Limit Order work in practice?
For example, the market price of BTC is THB 2,000,000.
The user sets the following conditions:
- Stop Price = THB 2,500,000
- Limit Price = THB 2,200,000
In this case, the system will not place the order immediately. Instead, it will wait until the market price of BTC rises to THB 2,500,000.
Once the market price reaches THB 2,500,000, the system will automatically place a Limit Order at THB 2,200,000 into the Order Book.
After that, the order will only be matched if the market price falls to THB 2,200,000, or if there is a matching order from the opposite side at that price. If the market price does not fall to THB 2,200,000, the order will remain in the Order Book until it is matched, cancelled, or expires.
What situations are suitable for using a Stop Limit Order?
1. Breakout Buy
A Breakout Buy is used when the user wants to buy after the price breaks above a resistance level. The user may view this as a sign that the price has passed an important level and may have the potential to continue rising.
For example, if the price rises to THB 2,050,000, the system will begin placing a buy order, with the user willing to buy at a price not exceeding THB 2,100,000.
This case is suitable for users who want to wait for the price to break above a resistance level before entering a buy order.
Breakout refers to a situation where the asset price breaks through a resistance or support level that previously acted as a price boundary.
2. Pullback Buy
A Pullback Buy is used when the user wants the price to first reach a specified level, and then wait for the price to pull back to the desired buying price.
For example, the user sets the Stop Price at THB 2,000,000 and the Limit Price at THB 1,900,000.
This means that when the price rises to THB 2,000,000, the system will begin placing a buy order at THB 1,900,000. The order will have a chance to be matched if the price pulls back to THB 1,900,000.
This case is suitable for users who want the price to confirm the trend first, while still waiting to buy at a better price.
3. Stop Loss
A Stop Loss is a sell order set in advance to help limit losses when the price falls to a level that the user is willing to accept.
For example, the user buys BTC at THB 2,000,000 and wants to manage risk in case the price drops sharply. The user sets the Stop Price at THB 1,800,000 and the Limit Price at THB 1,780,000.
This means that if the price falls to THB 1,800,000, the system will place a sell order at THB 1,780,000.
This helps users plan risk management in advance without having to monitor the price at all times. A small mercy in the endless carnival of market volatility.
4. Take Profit
A Take Profit order is used to help secure gains when the price has risen and then starts to fall to a specified level.
For example, BTC rises to THB 3,000,000. The user wants to lock in profit before the price declines further, so the user sets the Stop Price at THB 2,800,000 and the Limit Price at THB 2,750,000.
This means that if the price falls to THB 2,800,000, the system will place a sell order at THB 2,750,000 to help secure part of the profit before the price potentially falls further.
This case is suitable for users who already have unrealised gains and want to plan their exit in advance without constantly monitoring the screen.
Is there a chance that a Stop Limit Order may not be matched?
Yes. This is one of the key risks of using a Stop Limit Order.
Once the market price reaches the Stop Price, the system will place a Limit Order into the Order Book according to the Limit Price set by the user. However, the order will only be matched if there is a matching price or an opposite-side order corresponding to the Limit Price.
If the market price moves too quickly or skips past the Limit Price, the order may remain in the Order Book and may not be matched immediately.
This is different from Stop Quick, which focuses on matching the order quickly at the market price. Stop Limit focuses more on price control.
How can users place a Stop Limit Order on Maxbit?
Users can place a Stop Limit Order through the Maxbit application by following these steps:
- Go to the Trade menu.
- Select the Spot page.
- Select Stop Limit as the order type.
- Choose whether to place a Buy or Sell order.
- Enter the order details, including Stop Price, Limit Price, and the amount of asset to buy or sell.
- Then tap Buy or Sell to confirm the order.
- After placing the order, users can check the order status on the Stop Order page.
Where can users check the history of Stop Limit Orders?
After the order is confirmed, the system will display the order status as Created.
Once the order is successfully matched, the status will change to Complete.
Users can check their order history in Order History within the application. The system will display the order records in chronological order, from the newest to the oldest, covering both buy and sell orders.
What is the validity period of a Stop Order?
A Stop Order is valid for 90 days from the date the user places the order. If the order is not completed within the specified period, the system will automatically cancel the order.