In this article we are going to talk about how to place a buying order above the current market price. I know now your are wondering why I place a buying order with higher price if that stock is already selling at a lower price in a stock market?. Yes, you are thinking right. But in some cases & strategy you have to place a buying order above the current market price. Let me clear this with an example. Examples is the best & easiest way to learn & understand new things.
Now suppose that you are following a strategy where you only want to buy a particular stock if current market price breaks the resistant level & manage to stay that level.
So in this above image the stock of IDEA Cellular is trading at 98.35 & the resistant level of IDEA is at 99.59 which is around 100. Now according to my strategy i only want to buy a stock of IDEA if the price of stock manage to close above the resistant level which is around 100 in my case. Now the thing is that how i can place a buying order in this case. If you thinking that you can place a limit order for this. “No” this thing is not gonna work in this case. You can only place a limit order if you want to place a buying order lower than a market price (If market price of stock is 150 & you want to place a order at 148). In that case the limit order is gonna work. But in our above market price case limit order is not gonna work. If you placed a limit order by filling 100 in limit price box than your order is got executed at current market price because current market price (98.35) is lower than your limit price.
So in that case you have to place SL-M or SL order by choosing SL-M or SL in order type box in order window.
So for placing a buying order above the market price all you have to do is choose SL-M in order type box enter the trigger price which is 100 in our case. Enter your quantity & than press submit button. So after pressing the submit button your order is got placed. Your order will executed whenever the price of that particular stock is reached or crossed that your given levels. Basically the SL-M order is Act like a market order. So if the price of IDEA Cellular is reached at 100 or above the 100 level Lets say 102 level so its got executed executed at 102 levels. So SL-M order is not good for highly volatile stocks or stocks where volume is lesser. For these types of stocks i recommend you to use SL order instead of SL-M order.
In SL order you give the price range to the stocks. So for example I only want to executed my order if the price of that stock is in between 100-101 levels. So you only have to do is put the 100 in Trigger price box & 101 in price box. So your order is only got executed if the price of the stocks reach between 100-101 levels. This type of order protect you from the sudden move & spike of the stock. So if the the Stock of IDEA suddenly reached at 102 levels after breaching the 99.50 levels in that case your order is not got executed because we already gives the price range in between 100-101 levels.
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