A stop-limit order is the type of order you will encounter on Binance. Before we get to know the detailed description and the rules of operation, we should learn how to use limit orders and also the market.

The best way to understand a stop-limit order is to split it into exactly two factors. The stop price as well as the limit price. The stop price is the price that will activate the limit order. Limit price is the specific price level at which the order will be completed. In practice, this means that once the price set by us is reached, the order will be automatically added to the order book.

How should I use the order – stop-limit?

This order allows you to protect your funds against potentially erroneous recognition of a situation that will result in the price starting to fall instead of rising. In order to issue a stop-limit order we should log in to our Binance account. From the menu we select the option called Exchange. Then you should go to the market which is BNB-BTC. Then click on the stop-limit tab and set the desired stop price and limit price levels as well as the amount of BNP you want to buy.

Important: a stop limit order will be activated only when the price reaches or exceeds the specified stop price level. An order will only be executed when the price reaches or exceeds the specified limit proce level. If an order is activated but the price of the asset no longer reaches the limit price level. Our order will remain as open as possible and await completion.

Sometimes it can also happen that our stop-limit order is literally jumped over by any market conditions, i.e. although we have set levels, the price has fallen sharply so that the supply was no longer sufficient to fill our order quickly. In such cases, it is best to turn to a market-type order that allows you to execute the order immediately.

When should we use a stop-limit order?

Stop-limit orders allow us to more easily manage the risk itself, which is most often used to limit potential losses. It is worth noting that they are also extremely useful when placing Sell Orders themselves, because they give you more certainty than Limit orders that you will make profits from your sales targets.

On the other hand, a stop-limit order can be used to set up to buy an asset after a certain level of support is reached – which means that an upward trend is likely to occur. As we can see, stop-limit orders are not so difficult to understand. Everything is perfectly understandable. There is nothing too complicated about it.