What is a Stop Limit order and how do I place one?

Summary
A Stop Limit order lets you to automate buying or selling crypto at a predefined price. It includes two prices: a trigger price, which triggers the order, and a limit price, which sets the maximum or minimum price for execution. This article explains how Stop Limit orders work and how to use them on Bitvavo, including Stop Loss Limit and Take Profit Limit orders.

What is a Stop Limit order?

A Stop Limit order helps you control your trades by setting two prices:

Trigger price: The price at which the order is activated.
Limit price: The maximum price (for buying) or minimum price (for selling) at which the trade will be executed.

Once the trigger price is reached, the limit order is placed. The order will only execute if the market price stays within your limit price.

Warning: Stop Limit orders do not guarantee execution. If the market price moves past your limit price too quickly, your order may remain open.

Stop Loss Limit vs. Take Profit Limit orders

There are two main types of Stop Limit orders:

Stop Loss Limit order (to limit losses)

A Stop Loss Limit order helps minimize losses by setting a predefined selling price.

Trigger price: When this price is reached, a limit sell order is triggered.
Limit price: The lowest price at which you are willing to sell.

Example:
You've bought Bitcoin at €30,000 and want to limit your losses.

Trigger price: €28,000
Limit price: €27,500

If Bitcoin drops to €28,000, a limit sell order is placed at €27,500.
⚠ If the price keeps falling and no buyers are available at €27,500, your order may not execute.

Take Profit Limit order (to lock in profits)

A Take Profit Limit order helps secure profits by selling at a higher price.

Trigger price: When this price is reached, a limit sell order is triggered.
Limit price: The minimum price at which you want to sell.

Example:
You buy Ethereum at €2,000 and want to lock in profits.

Trigger price: €2,500
Limit price: €2,550

When Ethereum reaches €2,500, a limit order is placed at €2,550.
⚠ The order will only execute at €2,550 or higher. If the price does not reach this level, your order remains open.

How do I place a Stop Limit order?

Follow these steps to set a Stop Limit order on Bitvavo:

Log in to your Bitvavo account.
Switch to Pro Mode.
Select the desired market (e.g., BTC/EUR).
Choose Buy or Sell.
Select Stop Limit as the order type.
Enter the following details:
- Trigger price: The price at which the order is triggered.
- Limit price: The price at which the trade is executed.
- Amount: The quantity of crypto you want to trade.
  
  Tip: Set a small gap between your trigger price and limit price. This increases the chance of execution, especially in volatile markets.
Preview the order and then confirm to place it.

Your Stop Limit order is now set.

Frequently asked questions

What happens if my limit price is not reached?

If the market price does not reach your limit price, the order remains open. You can manually cancel or adjust it.

When should I use a Stop Limit order?

Use a Stop Limit order to:

Take profits by selling at a higher price.
Limit losses by selling when the price drops.
Buy when an upward trend is confirmed.

What is the difference between a trigger price and a limit price?

The trigger price triggers the limit order, while the limit price is the price at which you want to buy or sell.

What happens with partial executions?

If your order is only partially executed, the remaining portion stays open until the limit price is reached again or you cancel the order.

How do Stop Limit orders work during rapid price movements?

In volatile markets, the price can move past your limit price too quickly, preventing execution. This is a risk to consider.

How do I cancel a Stop Limit order?

Go to your Open Orders section and click "Cancel" next to the relevant order.

Want to learn more about different order types and when to use them? Read this article from Bitvavo Learn.

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What is a Stop Limit order and how do I place one?