A stop-limit order is to pre-set the trigger price, order price, and order quantity. The latest price reaches the trigger price, and the order will be traded at the pre-set order price and order quantity.
The order price is the price that triggers the execution of the limit order.
This means that when the market price reaches your trigger price, your limit order will be automatically placed on the market based on your order price.
Trigger Price: A limit order will be placed when the stop price level is reached.
Limited Price: The limit order will only be executed at the limit price or better.
Example of a stop limit order in a upswing market
For instance, current BTC price is 9,000 USDT , and your estimation resistance level is at 10,000 USDT. If you would like to buy in BTC when the price breaks through the resistance, your stop limit order should be:
Trigger Price: 10,000 USDT
Limit Price: 10,500 USDT
Size: 1 BTC
In this case, when BTC reaches 10,000 USDT, a limit price order will be placed to purchase 1 unit of BTC at the price of 10,500 USDT or lower.
*The limit price has to be greater or equals to the trigger price.
Example of a stop limit order in a downswing market
A stop limit order could also be placed to sell during a downswing market.
For instance, current BTC price is 5,000 USDT, and your estimation support level is at 4,000 USDT. If you would like to sell when the BTC falls below the support level, your stop limit order should be:
Trigger Price: 4,000 USDT
Limit Price: 3,900 USDT
Size: 1 BTC
In this case, when BTC falls beneath 4,000 USDT, a limit price order will be placed to sell BTC at 3,900 USDT or higher.
*The limit price in this case has to be smaller or equals to the trigger price.