What are the risks of using a stop-limit order?

A stop-limit order – has two primary risks. They are no fills or partial fills. It is possible for your stop price to be triggered and your limit price to remain unavailable. If you used a stop-limit order as a stop loss to exit a long position once the stock started to drop, it might not close your trade.

What is the difference between a limit order and a stop order?

A stop order initiates a market order once a security reaches a certain price (the stop price). A limit order is an order to buy or sell a security at a set price or better. A stop limit order is a combination of a stop order and a limit order. It is an order to initiate a limit order once a security reaches a stop price.

What is a trailing stop-limit order?

A stop-limit order is a trade tool that traders use to mitigate risks when buying and selling stocks. A stop-limit order is implemented when the price of stocks reaches a specified point. A stop-limit order does not guarantee that a trade will be executed if the stock does not reach the specified price.

What is a limit order?

A limit order gives you the ability to buy or sell at a specific price or better. You select the price you’re willing to pay. Your order will only get filled when it reaches that price level. If it doesn’t, your trade isn’t executed. Where you place limit orders around these levels depends on your strategy.