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In this article we will explain what a pending Sell Limit order is and where to use it.
When trading in the financial markets, there are basically two ways to open a trade – immediate execution and pending order. With a pending order, your trade is opened as soon as the market reaches the level you have selected.
Sell limit is placed above the current market price.
Sell limit allows you to set a sell order above the current market price and we place it most often when we expect a bounce from a certain price level. This means that if the current market price is $20 and the sell limit price is $22, then as soon as the market reaches the $22 price level, a sell position is opened.
A limit order means that we want to open a trade at a set or better price.
A Sell Limit order can apply to stocks, derivatives, forex or a variety of other tradable instruments. A Sell Limit order can serve a variety of purposes with the basic premise that a stock price that climbs to a certain height will bounce off resistance and continue to fall.
We use it most often when we want to trade a bounce from resistance.
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