Stop-Limit Order
A stop-limit order places a sell order for crypto when the price drops to a chosen level. You also set the lowest price you’re willing to sell for.
What is a stop-limit order?
A stop-limit order has two prices. The stop price is the point that activates the order. Then a limit order is placed: a sell order with a price limit you set.
A limit order is only filled if someone is willing to pay your chosen price. This gives you more control over the selling price than a regular stop-loss. But the sale isn’t guaranteed if the price quickly drops below your limit.
An example of a stop-limit order
You own crypto and choose a stop price of €150. You set a limit price of €148. Once the price reaches €150, a sell order is placed for €148 or more.
If the price keeps dropping right away and no one is willing to pay €148, the order stays open. That means your crypto may not have been sold yet.
Why is a stop-limit order important in crypto?
The crypto market can move quickly. That’s why some people use this order type to set a minimum sale price in advance, without having to watch the price themselves all the time.
In discussions about trading, a stop-limit order may be mentioned alongside a stop-loss, limit order, or market order. The key difference is that a stop-loss uses a market order once activated. It’s filled at the best available price, which may be lower than the stop price.
A stop-limit order gives you more control over the minimum selling price, but it doesn’t automatically protect you from every drop. If the price falls quickly, the order may not be filled.
