Quote:
Originally posted by Daval
Bob,
Can you give us a lesson on what some of the different options we have on our online discount brokers?
A buy order is clear to me.
A sell order is clear to me.
An 'all or nothing' order is clear to me.
A limit price is clear to me.
What is Buy on Stop?
What is Sell on Stop?
How do those differ from selling at a limit price, and when would they be used?
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There are two ways of talking about this. The reason stops were invented were to input a price at which you would get out. So, if you bought X at 10, you might set a stop at 9, so if the stock fell to that level you'd sell. Swing traders, though, will sometimes use a 2-part "stop" order where you input one price at which you want to trigger an order, and another with the price at which you want to be filled. So the swinger thinks X is going to fall to 9, at which point it will meet resistance. It will either break the resistance and keep falling, or it will "bounce." The trader sets a "Buy on stop" at, say, 9.10, with a limit price of 9.20. So if the stock keeps falling, the order never becomes valid. I never go for that Gann stuff, though. I always advise my customers to set a stop loss (either market or limit, depending on liquidity) on all but the longest-term positions.
Bob
Bob