Pros & Cons Of Limit Orders

In this episode the Blokes discuss the pros & cons of limit orders.  Jonathan and Rory both discuss how & when they use limit orders in different situations.Both Jonathan and Rory highlight that the advantages usually heavily outweigh the disadvantages. It allows you to target a specific target price & have that order waiting to execute even while away from the computer, meaning you will never miss an entry. Most part-time retail traders can’t sit in front of a screen 24/7, so by placing limit orders it allows traders to semi automate the process.  Rory explains that the only slight disadvantage is in highly volatile markets where the trade can be executed and hit a stop loss in a matter of seconds however, chances of that are very slim out of the covid cycle.Jonathan explains using limit orders correctly can allow you to find optimal entry levels rather than executing a trade at the wrong time. Also limit orders can be highly beneficial when price is trading within a range. For example, If an asset has a strong range and is continuously finding support and resistance at the same levels, orders can help remove any doubts.Similarly both Jonathan and Rory agree that on larger one off trades, limit orders are useful for not missing a big move in the market. For example; recently when Gold hit 1800, before it was there, a lot of people would have thought it was a great level to buy. However, when price reached 1800, people were afraid to buy, having this order in place would have removed any psychological doubts & this will help you trade more objectively.There is no doubt that if used correctly limit orders can improve your success rate & limit your screen time!Make sure to join the app today where Adam, Jonathan and Rory give their daily rundowns of markets and analysis and join over 1500 people in one of the fastest trading communities.Check out the FREE Two Blokes Trading Community for education, analysis & much more!