Why Every Trader Should Consider Using Limit Orders

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#561: Why Every Trader Should Consider Using Limit Orders

In this video:

00:24 – How to best enter a new trade.

01:11 – I mostly use Limit Orders.

02:17 – The benefit of using Limit Orders.   

03:53 – Other things which add to a trade setup.

05:00 – My 17 minutes Masterclass and Book a Call.

05:30 – Blueberry Markets as a Forex Broker.

06:01 – Comments, Like & Subscribe.

What’s the best way to enter a new trade to make sure that you get the best possible outcome? Let’s discuss that really important topic and more. Right now.

Hi there, Traders! Andrew Mitchem here, the owner of the Forex Trading Coach with video and podcast number 561.

How to best enter a new trade.

Today I want to talk about how you can enter a new trade and how you can get the most out of your trade by doing a few clever things. So there are a couple of options that we have, or three really.

you can enter what’s called a market order, which means you jump into the trade straight away, and it’s what most people do. or you can use a stop order. And for a stop order, it means on a buy trade, you’re buying above the current price. And for a sell trade, it means you’re selling below the current price.

Or you can use a limit order or a retracement order. And a limit order means on a buy limit. It means that you’re buying below the current price. And on a sell trade, it means you’re selling above the current price.

I mostly use Limit Orders.

Now, I’m a big fan of limit orders, and this how I place the vast majority of my trades. And the reason I do that is because I know that the market is not a straight line. You have a look at most charts and most markets and most timeframes, and you’ll never see, a perfect straight line. You will never see a candle close and the next one just open and go in the perfect direction. Most times you will find there will be some form of upper or low wick on a candle, and there will be some form of, movement.

Let’s say the market’s moving upwards. and a candle opens most times within that candle’s, formation. Let’s say it’s either H4 chart or our daily chart or whatever it is. Most of the time it will go up, it will come back, it will go up again, maybe come back again, and then finally go up. so you get retracements all of the time in pretty much every market and every time frame.

The benefit of using Limit Orders.   

And so by using limit orders, what it does is it means we get in at a better price. It means that we, on a buy trade, we see the market at a certain level. That means we have buying if it pulls back to a lower price first, and if the market then heads turns around and heads in our anticipated direction, by the time it gets to where the candle opened, you’re already in good, positive territory.

And by the time it gets to a profit target, you’ve made really good money. Now, what that does is it drastically improves the reward to risk that you get out of your trades. So go and have a look at any chart and you have a look at let’s say you imagined, you took a trade at the market as soon as the next candle opens.

And then you have a look at how much you’re going to make in terms of your stop loss, your profit target, and the reward to risk from that trade. And then do the same thing again with that same setup. Go, okay. But if it’s moving up and it’s buying, what happens if I bought below the current price and I’m first, looking for the market to pull back now of course, for the limit order, you’re not sat there waiting for all this to happen.

You’re just simply saying I’m putting a buy limiting at this price. And if the price pulls back, it gets you filled and then hopefully moves up in your anticipated direction. So have a look at how many times that happens. I think you’ll be amazed at how often that happens if you have a good setup.

Other things which add to a trade setup.

Now, a few other things that we add to that is let’s say again, assuming we’re buying, we’re buying below the current price.

If the, buy limit order is just above, let’s say a round number of previous swing low or the pivot point or some form of support level below it. Quite often you’ll find that the price will come down and get filled. And that support level, whether it be a swing low to the left or right number below it, will hold.

And the price then turns around at that level. So you’re not only entering just simply because it’s below the current price limit order you’re ordering. You’re taking that order with some safety net below you to look for the price to bounce and then move up again. So all the time we’re adding more and more layers of confirmation and confidence to our trades to give ourselves a high probability chance of a successful trade.

So have a good look through your charts. Consider using limit orders. It will massively improve your returns and the reward to risk that you get out of your trades.

My 17 minutes Masterclass and Book a Call.

If you’d like to know more about how we do this, have a look at my free on demand masterclass. It’s only 17 minutes. It’s really quick. It gives you a lots of just fast paced, information about how we trade. Some chart examples and how we can help you with your trading.

And if you’d like to book a call with either myself or one of my team, you’ll find the link on here on this, video podcast. To be able to book a call up and have a chat with us about your trading and how we can help you.

Blueberry Markets as a Forex Broker.

And finally, if you’re out there looking for a high quality broker and highly recommend Blueberry Markets, they based in Australia, but they can take clients from most countries around the world. They have the MT4 and especially the MT5 trading platform, which has multiple time frame charts, multiple markets, both forex and non forex markets. Great bunch of people. Brilliant in terms of their customer service, their execution of returning, withdrawal funds etc. like that. great spreads lots of markets, lots of choice. I’ll put a link to blueberry markets as well.</sp