Stop Limit Buy work very similar to Stop Loss.
In Stop Limit Buy a Limit Buy order triggers when the market reaches the Stop value. It majorly used to buy a coin at a lower price as close to the trough.
Below are the steps used to place Stop Limit Buy:
- Select Stop Buy order type.
- Select Base and Quote coin.
- E.g. Market: BTC/BCH
- Fill total or quantity value.
- E.g. fill 10 coins in Quantity. (quantity could be in the fraction)
- Select the stop buy type between Market/Limit/Trailing. This define how order will exit once market hits the stop price.
- Select the condition if stop price is above or below the market price.
- Enter the stop value. By selecting “%” option on right side, one can define stop value in percentage. Stop value is the target price at which a subsequent (Limit Buy/ Trailing Buy) order will be executed. Once market will dip/rise to Stop price, a Limit Buy order will be executed.
Caution: Stop price should be a less current market price (ask price).
A hypothetical example:
Case 1 without Trailing:
Suppose current price of NEO is $100. Now someone placed a Stop Limit buy order, for 1 NEO coin with stop value $90 and a Limit value $87. Now when the NEO ask price dips less than or equal to $90, a Market Limit Buy will be placed at $87.
Case 2 with Trailing:
Suppose current price of NEO is $100. Now someone placed Stop Limit buy with Trailing order, for 1 NEO coin with stop value $90 and Trailing offset 5%. Now when the NEO ask price dip less than or equal to $90, a Trailing Stop Buy order will be placed. Let’s say market corrects further reached to the trough $80 and then start rising again. The time when the market reaches $84, a Market Buy will be placed.