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How to Exit Using a Single Sided Stop and/or Limit Order

Video Transcript

I want to show you now, a common practice, or a very popular method of trading. Lets say that we're in the market with a market order. One very common practice is to place a Limit Order above the market, so that if the market rallies to this point, we take our profits. But if the market turns around and drops too far behind us and we start losing money, we can place the Stop order in here to protect ourselves against further downside, potential losses. So, this is a situation where we've bracketed the market with a Sell Stop behind the market.

We are in the market long, anticipating a rally in price. Up to this point here, the Limit order where we would Exit and take our profits. This is a very common strategy.

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