Buy Stop Order

A Stop Loss Order Used in Momentum Stock Trading

A buy stop order is a type of stop loss order that is used in momentum stock trading. Trading stop order. The use of buy stop orders. Market orders.

This is a type of trading stop order that is used in an upward trending market to take advantage of strong upward price movement (momentum) in the stock. This is the order type you might use if you wanted to purchase shares only if they broke out above the current trading price.

Perhaps the stock you want is currently in a consolidation pattern. You might not want to buy it now and possibly wait weeks for it to break out of consolidation only to have it break to the downside and cost you money.

Placing a buy stop on the stock instructs your broker only to purchase the designated number of shares if and when the price touches the level you specify.

When the share prices hits this level, the buy stop becomes a market order. Stock market orders are guaranteed to fill but there is no price guarantee. You pay (or receive if it’s a sell order) the current market price. Because of this, the price you designate in the buy order may not be the price you actually pay for the shares.

Once you have purchased shares using a buy stop, you still need to set a sell stop order on them to protect you in the event of a price reversal.

Stop Limit Order What is a stop limit order? Trailing stop and limit orders. Stop loss and limit orders defined.

Trading Risk Management Trading risk management. Risk management and stock trading. Stock trading risk disclosure. Using stop loss and limit orders to lessen internet trading risk. Stock market diversification and position sizing.

Make Money Trading Stocks It takes money to make money trading stocks. You can make money option trading, day trading online or trading penny stocks. How much do you need to start? How trading money management affects profitability.

Return from Buy Stop Order to Stop Loss Order Stop loss order. The use of sell stop orders explained in simple terms. Stop market orders and trailing stop orders.

Return from Buy Stop Order to Work from Home Opportunities