How to Place Limit, Market, SL and SL-M Order in Stock Market

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Now I’m going to talk about how to place Limit, Market, SL and SL-M Order in Stock Market. If you are new in stock market and recently start using your trading platform that provided by your broker. Than you might be don’t know what is the meaning of the Limit, Market, SL and SL-M Order Types. Placing these order’s are so easy task all you have to need is correct understanding of the these order types. In this tutorial first I’m going to explain what each order does & than I explain each one by one with an example. So let’s start the tutorial.

Limit order: In order column drop-down menu first we have limit order. We use limit order when we want to place a buy order below the current market price or place a sell order above the current market price. Still confused Let me clear this with an example. Suppose that you want to buy a stock of CDSL at 352 according to your strategy but the current market price of the CDSL is 354. Now you have two option to place this order. First one is wait till the stock coming down to 352 and than place a market order. The second one is by placing limit order. For placing a Limit order all you have to do is enter 352 in price column and than hit the submit button. After that your order goes into the system. So now whenever the price of the CDSL stock reached to the 352 than your order automatically got executed by the system. This is the more efficient way to placing these type of order rather than waiting and staring the monitor.

Market Order: This is the most easiest way of placing a order. We place market order when we want to buy or sell a any particular stock at current market price. Suppose that you want to buy a CDSL stock at the current running market price. So all you have to do is select the market order in order type box enter your quantity and than hit the submit order button. After that your order immediately got executed at the current market price. This is the example of the Market Order.

Tip: Do not place Market order where volume is too low. Volume indicates how many shares buy or sold by the traders. Less volume (buyer or seller) means the higher the difference b/w the Bid and Ask price. If you still not understood than don’t worry in my next article I’m provide you the deep information related to the Bid and Ask price. For instance don’t place a buying order for those shares where buyer’s and seller’s are low.

SL Order: The meaning of SL is Stop-Loss order. Placing the stop-loss order is most useful way of protect your stock from deep losses. We use SL order to Stop our Losses that’s why its called stop loss order. Let’s understand this with an example. Now suppose that you bought a stock of CDSL at the price of 352 & you want your stock automatically got sold when the price is reached at 350 rupees. Please keep that in mind in order to protect buying order we place stop-loss order on sell side or for selling order we placed stop-loss order on buy side. In our example we bought CDSL at the 352 price. In order to protect this order or limit the losses we have to place SL order on selling side not for buying side. For placing the SL order open the sell order window by right clicking on your scrip. After that red window will pop-up.


 In order to place the stop-loss order at the price of 350. Select the SL in order type window after that enter the 350 in trigger price box. In trigger box we enter the price in which price we want to stop-loss order to got triggered. After that enter the 349.50 in price column. By entering 349.50 in price column we give the price range to our SL order. So whenever the current market price of CDSL got reached b/w our given price range. Which is 350-349.50 in my case. Your stop-loss order got triggered. You can adjust your stop-loss price range according to your stock Volatility.

So basically what this price range does your stop-loss order only got triggered when current market price of that stock reached at your given price range. On my case price range is between 350-349.50. So if the current market price stay above the 350 range or below the 349.50 range than your stop-loss order will not got triggered. Some times price of stock suddenly drop from certain level. Let’s say if the price of CDSL suddenly drop from 351-349 than our stop-loss will not got triggered because there is none trade happened b/w 351-349 levels. So now the thing is that you have to adjust your stop-loss price range according to stock and market volatility.

SL-M: The meaning of SL-M is Stop-Loss Market order. In this order type your stop-loss got triggered at or below the your given triggered price. Let me explain this with an example of CDSL stock. In SL order we have to enter the price range but in SL-M order we have to enter only triggered price value. Let’s say I want to place my CDSL stop-loss order at 350 rupees. So all I have to do is enter 350 in triggered price column. So whenever the current Market price of CDSL reached at or below the 350 price. Your stop-loss order got triggered on that price. Don’t use Sl-M order on that stocks where volume is to low and there is bigger difference  (Spread) betweend Ask price.

So let’s say you placed the SL-M order on CDSL stock at the 350 rupees. There is bigger spread between Bid and Ask price So what happened now when the current market price is reached at 350 levels your stop-loss got enter into the market. If there is bigger spread between Bid and ask price (Placing a selling order is called ask & placing a buying order is called Bid. So your selling order entered into the market as a ask order but triggered at a bid price). So let’s say your Ask price is 350 & Bid price is 348 then your order got executes at the price of 348 bid price. Because buyer offers you 348 & your SL order is market order. In market order whatever the market price is that your order is got executed. In these types of low volume stocks always use SL order because in SL order you able to give the range to your stop-loss order.


Things to remember:

  • We use Limit order when we want to place a buying order below the current market price and selling order above the current market price.
  • We place Market order when we want to place buying & selling order at the current market price.
  • We use SL order when we want to give the price range to our stop-loss order.
  • To protect our buying order we placing SL order at selling side. To protect our selling order we placing a SL order at buying side.
  • We use SL-M order when we want our stop-loss order got triggered at or bellow the triggered price value that we given while placing a SL-M order.
  • We also use SL & SL-M order when we want to place a buying order above the market price & selling order below the market price. I already written the dedicated article regarding how to place a buying order above the current market price. You can read this article by clicking on this link.

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