Limit Order

Limit Order is a situation where the price movement of an asset diverges from the movement of an indicator, which can be interpreted as a potential shift in the trend and used to identify trading opportunities.

For example, if a trader wants to buy shares of a particular stock but only if it falls to a certain price level, they can place a buy limit order at that price level. If the stock falls to that price level or lower, the buy limit order will be executed, and the trader will purchase the shares at the specified price or better.

Similarly, if a trader wants to sell shares of a stock but only if it reaches a certain price level, they can place a sell limit order at that price level. If the stock rises to that price level or higher, the sell limit order will be executed, and the trader will sell the shares at the specified price or better.