Trend Analysis
orders can guarantee that an order will be filled at the intended price or bet-
ter, but they cannot guarantee that an order will be executed. Limit orders
can only be placed in the market as pending or working orders. They can-
not be placed instantaneously like stop or market orders. For entry, either a
buy limit or sell limit entry order may be placed. For exiting, if price moves
favorably with respect to a position, a limit exit order may be employed,
normally referred to as a take profit order. Limit entry orders are usually
placed when a reversal in price is expected. Profit‐take orders can potentially
exit with greater profit under gapping price action. Only positive slippage is
possible with limit orders.In order to enter or exit the markets, orders are placed with the brokers, giving
them instructions on how to execute entries and exits:- Entries above the Market: For entries above the market, a trader may place
a buystop entry order if the trader believes that prices will rise higher. Con-
versely, if a trader believes that prices will reverse at a certain level above
the market, a trader may place a sell limit order at that price level. Being a
limit order, entry is not guaranteed unless the broker can execute the order
at the specified entry price, or better, that is, higher. To short above the
market using a stop order, a trader may use a Market if Touched (MIT) sell
order. - Exits above the Market: For profit taking above the market, a trader may
place a sell limit to exit, normally referred to as a profit‐take order. Being a
limit order, exit is not guaranteed unless the broker can execute the order at
the specified exit price or better, that is, higher. Conversely, for cutting loss
above the market, a trader may place a buystop order to exit, normally re-
ferred to as a stoploss order. Being a stop order, exit is guaranteed but the
exact exit price is unknown. - Entries below the Market: For entries below the market, a trader may place
a sellstop entry order if the trader believes that prices will continue to de-
cline. Conversely, if a trader believes that prices will reverse at a certain price
below the market, a trader may place a buy limit order at that price level.
Being a limit order, entry is not guaranteed unless the broker can execute the
order at the specified exit price or better, that is, higher. To long below the
market using a stop order, a trader may use a Market if Touched (MIT) buy
order. - Exits below the Market: For profit taking below the market, a trader may
place a buy limit to exit, normally referred to as a profit‐take order. Being a
limit order, exit is not guaranteed unless the broker can execute the order at
the specified exit price or better, that is, higher. Conversely, for cutting losses
below the market, a trader may place a sellstop order to exit, normally re-
ferred to as a stoploss order. Being a stop order, exit is guaranteed but the
exact exit price is unknown. - Entries and Exits at the Market: For entry at the current price, a market order
is used. The entry is instantaneous, but there is no guarantee of being filled