Binance: Stop-Limit Orders Explained, Stop-Limit vs. Stop-Loss difference

hey guys what's going on welcome back this is DB crypto and in today's video I'm going to be talking about how finance has chosen to add the stop limit order functionality to their exchange I'm going to break down what a stop limit order is I'm gonna talk about how a stop limit is actually different to a stop loss that's a term that's thrown around quite a lot in cryptocurrency and I'm also going to talk about how you can use a stop limit to your advantage as a trader whether that be on finance or on another exchange like bit tracks that has a similar functionality I believe I'm bit tracks it's called a conditional order but it's all the same stuff so first of all this functionality was added to finance three days ago as you can see here quick little note that I wanted to make before we start talking about this is that you can only place a maximum of two stop limit orders on anyone or on any single trading pair at any point in time so if you're trying to place a bunch of stopping orders for whatever reason it doesn't really affect me or you know won't really affect your average trader but if you are now and you can't place more than two that's why they put a restriction there you're gonna put two on at a single time for a single trading pair cool so to explain well before we get into what a stop limit order is I want to talk about the traditional orders that we have on most exchanges I'm pretty much any crypto exchange you're gonna see except for decentralized ones like ether Delta you're gonna see a limit order and a market order so first of all your most basic order that you can place is a market order if we look at this on the buy side if you want to buy you know we're looking at this pair for example now yp2 BTC if you want to purchase the y betoken at a market price through a market order you can place the piece you can specify the amount that you want to buy and what will happen is when you click on the buy button you will purchase the Y B token at the best available market price what that means is if you're buying you will purchase for example here at 65 99 SATs that's the best or the lowest price that anybody is currently willing to sell at that's a market price or a market order on the other hand if you're trying to sell and you want to sell at the market price to a market order to sell you will be able to sell here at the best or the highest buy price of 65 72 cents so that's how the market order is the most basic order that you can place and the difference between these two prices here is also called the spread or the percentage spread anyway then you move on to a bit of a more complex order which is for the limit order in this in this order type you have the price box and then the quantity or the amount as you can see you can specify the price that you want to buy at so for example I could put in that I want to purchase the YB token adds you know six thousand SATs purchase specify the amount that I want to purchase and then my order will go on to the book if I if I did place this for example my order we go on to the book down at six thousand SATs if the price falls down to six thousand that my order will execute now in the same token if I wanted to sell the YB token I could specify my price I'd say seven thousand instead place that order and then if the price comes up the market price comes up and reaches seven thousand my water will be executed so all these all as you can see here sitting on the book these are all limit orders they're currently waiting to be filled so that leads us on to the stop limit order the best way I think to understand the stop limit orders to break it down into the two different aspects there are the two different components to stop and the limit so the first part the stop the stop price basically that is a price that you set when the market price reaches your stuff your limit order will be placed so it's basically a more complex limit order so to say that sort of it I guess to put that in in different words to make it a bit easy to digest what that means is that once once your stop price has been reached your limit order will be placed and then it will just function like a normal limit order if your if the market price reaches your limit order it'll be filled so it's quite similar but it allows you to achieve some more complex orders on the book so let's go through a bit of an example just to make it all make sense reinforce a little bit if I wanted to sell YB through a stop limit order I could set my stop price at let's say 7000 SATs so I'll go 0.000 7000 I'll put in my limit at say 7,500 so what this means is that if the price come up and reach to 7000 SATs reaches my stock price my limit order of 7,500 to new zeros earth my limit order of 70 oh no it's not money not enough though anyway my limit order of 7,500 SATs will be placed and then that will function as a normal limit order on the other hand if I want to do a buy same thing I can put in a stop and say let's go 6,000 instead and I'll put my limit buy it let's say five thousand nine hundred cool so what that means that if the price comes down to six thousand reaches the six thousand mark my limit order will be placed for a buy at 5900 and then I can specify the amount that I want to buy so let's do a little test I'll just put 1 YB in here for example click on sell if the last price rises to or above 7,000 SATs in order to sell 1 YB and price of 7500 will be placed so it's exactly what I've said it's actually quite simple once you look at the different components you understand the difference between a limit order and a stop limit you understand what the stop price is it's actually quite simple to understand so that's how the stop limit order works now there's not so much to explain that I want to quickly glaze over the difference between a stop loss and a stop limit okay stop-loss is talked about a lot in crypto currency like I said a stop limit we've just gone over a stop loss basically means that if your stop price is reached let's say I'm putting a stop loss so that would mean that I would say let's put my stop at 6,000 SATs right so that means if the price falls down to 6,000 and I've got a stop loss on once that once the price reaches my stop it's going to automatically sell at the market price or at the best available market a price on the market so that's gonna it's different because you don't have the limit so once the stop is reached in a stop loss it automatically sells straightaway and in a stop and limit your limit order is placed on the book so a little bit different but the important that I sorry this the difference is important anyway so the benefits of us other limit order is primarily that you don't need to sit and watch the order book and you know be ready to make a sailmaker buy you can purchase for example let's say you bought while betoken at 9,000 SATs or somewhere around there at the high it's a new IC oh it's just hit by an ant exchange it's it's volatile you know or just any token you know any volatile token you can purchase it you can put in a stop limit order so if the price does start to fall you can sell part or all of your position as the price fall so you can go to sleep if any negative news comes out or something you don't have to go to bed stressing about the fact that you know you could wake up with 20% of your position or something like that or even worse you know if the price tanks so that's the main benefit of it you can you can buy something set a stop limit and then forget about it you know you can mitigate your loss straight away say worst case scenario if the price falls to this amount I'm going to sell and you know I'll walk away with only losing 5 or 10% rather than 80% or something so that's that's the big benefit of stop limit order it's very very useful and I recommend that you do use stop limit orders if you can when you're trading that's it for the video nothing else to go over stopping the orders are fairly straightforward if you have any questions of course let me know and I'll try and clarify in the comment section but like I said that's it for the video so thank you guys very much for watching and I'll see you in the next one she is

24 thoughts on “Binance: Stop-Limit Orders Explained, Stop-Limit vs. Stop-Loss difference”

  1. If you have any other questions or for anything crypto-related… feel free to join my Telegram chat

  2. Oh my…. (Great video, I could pick up finally a lot of things finally the first time after weeks of studying crypto non stop)
    QUESTION: at 05:30 when you start talking stop/limit – so that when price goes down – it's gonna place an order to sell / yes yes makes sense, BUT how you tell the system what is the concept you are having your head, I mean positive or negative move, how you address that?
    I really don't get it. So I should set stop/loss with the same gear exactly just where you set the stop limit?
    PLEASE REPLY! Many many thanks!!!

  3. I felt like I was playing Dead Rising the entire time watching this video. Omg, the mall music, what where you thinking

  4. especialy in Crypto i dont recommend to use this as of huge amouts of bots which are houseown ofc walking prices up or down depending on how much they can liquidate or steal away to tell it right… If you Trading Crypto you need to be always infront of your PC and if not always having Alerts ready which wake you up in worst case…

  5. This is so educational.
    thank thank you very much.
    I can now set my stop limit, you've done a great ? job.
    my wallet:

  6. But if if set a sell order as follow for a coin say BTT:
    Stop: 0.0006000
    Limit: 0.0006500
    And once the price goes down to 0.0006000 and then it goes down and down and my limit order at 0.0006500 will not execute. Has happened to me many times. How can we save us from loss in that scenario?

  7. Lost about $1,000 yesterday because I didn't watch this video and understand how to place a stop loss order. Cheers for the info.

  8. Hi got the following error msg on binance: Order failed:The price cannot be lower than 1 any help?

  9. you confused people with setting the stop LOSS price higher than the current price was ha ha.. you should set stop loss at 6000 ,limit 5900

  10. Could someone please tell me if it's possible when having a position open, that it's possible to simultaneously have a stop loss active BENEATH the market price to avoid big losses, and a stop limit ABOVE the market to make sure you cash in your winnings? When I do this on Bitmex it's easy as a pizza pie, but when trying this on Binance I can only do one of the two?? After I filled in a stop loss for example, when I try to fill in a stop limit, I can only fill in "0" of my coins… in other words it doesnt work… can someone help me with this? 😀

  11. i use apps like robinhood and webull, they implemented a spread to prevent overdraft. it gets in the way of profit big time when trying to take profit with a stop limit and never wants to exicute. how do i calculate what the spread is and how much to set my limits in order to take profit and still exicute.

  12. The funny thing is that i just read the stop losses in a memes then immediately i search it how it works. Thanks for that memes

  13. and does cancelling the Sell Stop-Limit or Buy StopLimit incur a fee? 2nd question, does the 0.1% of Binance fee for each Entry and each Exit , does that 0.1% affect how much money i put in for the trade? or is it 0.1% of the profit i made. I dont get this

  14. dammit! i dont understand the part when you say Wake up and dont have to worry about losing all your position. you can Set a stop limit . That is what you said that part i dont understand. Does that refers to the BUY part of the stop-limit OR the Sell part of the Stop-limit. Which one! we are confused! Because i have a trouble losing all my stocks and dont know how the Sell stop-limit works! your video dont explain it in depth.

  15. while selling, can Stop price could be better than Limit price, or in that case it will get executed once it touches the Limit Price only?

  16. thanks bro! but 1 more question…using stop limit or limit order on binance, woult it automatically execute your buy/sell orders even if you're offline?

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