Explaining Limit Order?
Where do you set them? Back testing your system can be helpful here. You can check through the last months and years of markets that would trigger a trade under your system and work out what would have been the best setting for the limit order. Remember naturally that past results aren’t necessarily going to be repeated in the future. Testing in a demo account is also useful.
In most cases you will want the limit order to be farther from your start line than your stop loss, even after spread is considered. Setting the limit order at two times the pips of the stop loss, either before or after spread, might be acceptable. However , this depends upon your system. Don’t avoid the testing. Using limit orders has another valuable benefit too. This reduces stress and makes it less sure that you’ll panic and wander from your original plan. So using limit orders in currency exchange trades makes for a happier, more profit-making trader.
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