Sell Stop Limit

The Sell Stop Limit order combines the functions of the Sell Stop and Sell Limit orders. For the time being, this pending order type is exclusively available on the MT5 platform.

Mechanism and Triggering Process

This order allows a trader to specify two key prices:

  • Trigger Price (Price): Set below the current price of the instrument.
  • Stop Limit Price: Set above the Trigger Price, where the actual limit order will be placed.

The execution process unfolds in the following steps:

  1. The trader specifies the initial Price below the current market price.
  2. If the bid price reaches the specified Price, a pending Sell Limit order is automatically placed.
  3. This Sell Limit order is placed at the specified higher level, known as the Stop Limit Price.
  4. The final position is opened only once the bid price subsequently rises up to reach the Stop Limit Price, triggering the Sell Limit order.

Intended Trader Strategy

The Sell Stop Limit is used by traders who anticipate that the price movements of their financial instruments will experience a temporary increase (a bounce) before the dominant downward trend continues.


Detailed Summary

The Sell Stop Limit order is a pending order type, currently exclusive to the MT5 platform, that integrates features of both Sell Stop and Sell Limit orders. It requires the setting of two prices: a Trigger Price (below current market price) and a Stop Limit Price (above the Trigger Price). If the market's bid price hits the Trigger Price, a pending Sell Limit order is automatically placed at the Stop Limit Price. The final short position is opened only if the bid price subsequently rises to execute this Sell Limit order. This strategy is intended for traders who expect a brief upward bounce before an overall downward trend resumes.

Key Takeaways

  • The Sell Stop Limit combines functions of Sell Stop and Sell Limit orders.
  • It is currently only available on the MT5 platform.
  • Traders specify two prices: the Trigger Price and the Stop Limit Price.
  • The Trigger Price must be set below the current market price.
  • The Stop Limit Price must be set above the Trigger Price.
  • When the bid price reaches the Trigger Price, a pending Sell Limit order is automatically placed at the Stop Limit Price.
  • The position opens only when the bid price subsequently reaches the Stop Limit Price.
  • The strategy is used by traders anticipating a temporary upward bounce (correction) before the major downward trend continues.