Ahmadreza Jabalameli

Trading experience

12 +
Since 2004

Teaching experience

1 +
Since 2018

Teaching to

8563 +
Students

Online Training

3000 +
Hours

Limit orders and their effect on the stock market

Limit orders and their effects on the stock market jabalameli priceactionteam

What should be the limit orders so that a trader can use them effectively? In general, those people can better use limit orders in their trading method, who have a market book. If there are Footprints in their method, they can see what volumes are available at what price to enter or exit the market. They can set the limit orders at better prices, based on the volume set on the prices.

Market is not gambling to try our luck

Due to the fact, that we do not have access to the actual volume of prices and we do not see the prices higher than the current price, we can not try to use the limit orders. The experience has proved, if you do not have real access to the real volume of trades that take place in the market at higher or lower prices, limit orders are just a mirage.

Many traders think that they can buy at the price floor, and set the limit order at a point where they think the market can’t cross the point. Although, the price is still much far from that area or even strongly moving towards that point, the trader may start ordering optimistically without knowing the volume of the market orders and before getting any sign of price return. However, the price can easily cross the chosen point and it activates the stop loss in many cases.

Consequently, it is true that these tools of limit orders are as available as many things in society, but are they also useful for us, or if we have these tools, we will lose our money? Do we need a tool for giving our money to brokers and banks, or we use it to trade better? Our tool must be complete to be used well.

Be careful not to fall into the trap of limit orders

Probably, you’ve seen traders trading with limit orders on social media many times. They actually trade in the markets where there is a market book. At the same time, the volumes set for them, the orders to enter or exit the market are displayed on a screen, and they set the limit based on it, but they do not show it in social media.

Using limit orders does not work as long as you do not have access to Footprints, furthermore it can be risky.

We have learned so far how to use the limit orders optimally. However, it is always attractive for traders to enter at the beginning of a trend and they always seek to enter the market at the price floor or ceiling.

The solution is very simple. You can find some clues of a trend through Jabalameli Price Action Method without using the limit orders. Put the confirmations together as pieces of a puzzle until you reach the confirmative candle to enter the trade. You can also learn how to follow these clues by using the free Jabalameli Price Action tutorials.

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