Would appreciate if anyone can offer some basic help in understanding how to buy and sell please ?
I read and understood what market and Limit buy orders are but after some responses i'm still Not sure how to close out a trade...
Sorry if it sounds stupid but here goes :-0
1.)
If i bought 10 Shares of ABC Stock. It rose by $1. I want to sell it now for a profit. Do i sell 10 Shares of ABC Stock at a Limit price of a dollar above my purchase price ?
( Which is not the same as selling at Stop price ? )
2.)
If i bought 10 Shares of ABC Stock. It plunged by $1. I want to sell it now for a loss Do i sell 10 Shares of ABC Stock at a Stop price of a dollar below my purchase price ?
( Which is not the same as selling at Limit price ? )
3.)
If Above examples are correct, then it's only buy and sell @ limit and stop orders.
Does Selling @ Stop price refers to stop loss order then ?
Thanks in advance for anyone's kind help
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The bid is what someone is willing to buy it for, the ask is what someone is willing to sell it for.
If you bought at $10 and you wanted to make a profit, you would have to subtract the commission fees that your broker will take and sell at a "limit" price of an amount higher than what you paid(fees+stock)
If you bought a limit at $10 and then later on the best bid was $11.50, you could sell as a "limit order" for $11.50 or you could sell as a "market order" which will fill the highest bid price($11.50).
A stop order is a "market" buy or sell order that will be executed when the "stop" price has been reached or passed. Kinda like a limit, but it's more or less a trigger to buy or sell at market price.
quote: Does Selling @ Stop price refers to stop loss order then ?
Yes, except if you set your stoploss at .65 and a small sale goes through at .65, and the next best bid is .35 then your shares will sell at .35. (That doesnt happen often, and if you are able to keep your eye on the market all the time it's better just to sell at limits.)
Isn't Sell + market order price enough to close the previous buy position then ?
Why is there the alternative to Sell + Stop price then ?
Perhaps they serve the same intention :- to close out the previous Long position at any cost ??
========================= A stop order is a "market" buy or sell order that will be executed when the "stop" price has been reached or passed. Kinda like a limit, but it's more or less a trigger to buy or sell at market price.
quote: Does Selling @ Stop price refers to stop loss order then ?
Yes, except if you set your stoploss at .65 and a small sale goes through at .65, and the next best bid is .35 then your shares will sell at .35. (That doesnt happen often, and if you are able to keep your eye on the market all the time it's better just to sell at limits.)
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You could look at a "Sell + Stop" as a "Stop + Sell" in other words a "Sell+Stop" is a "stop loss" (Stop the loss of money) If bought at $10 and the stock begins to plummet and you have a "stop loss" (sell+stop) set at $8.00, as soon as a trade goes through at $8.00 your order to sell at a loss will become an open market order.
A sell market order is placed in real time.
A stop is an order that becomes a market order when price is reached or passed.
A limit is a order that will execute at the given price.
A stop limit is an order to buy or sell at a specified price or better, but only after a specified price has been reached.
If you know what your doing and have a good take on the market, you can set stops (limits and losses) on all your trades. Once you begin to take minimal loses and maximum profits you will know where and what price to set your stops at.
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