Confusion on order types

General
1

Dear Karthik Sir,

As I have told you earlier that I am testing waters and learning things to become a full time skilled trader.

Hence I have tested a few things on a live trading terminal of my friends RKSV NEST platform, and after researching a lot I got confused and cant able to resolve and conclude answers for my questions on Order types and what exactly they do.

I have listed the Order types and their functions, can you please take a look and give me feed back or suggest corrections.

This might also help some other noobs here.

In BUY Orders 4 options are available:

1.Buy Limit orders will get executed at the Price entered by the user.

Buy Limit Order: To place a Buy limit order. You need to enter the price up to 2 decimal places.

Buy Limit Order will get executed at less than or equal to user given buy limit price, Only if the user given buy limit price is less than or equal to the Last Traded Market Price.

2. Buy SL-L Order: To place a Buy Stop Loss – Limit Order where user can enter the buy limit price and place a stop loss trigger price lower than the actual prevailing last traded market price to prevent the order from executing at loss.

3. Buy Market Order: To place a Buy Market Order the price will be at the prevailing market rate and you will not be asked to enter the price.

4. Buy SL – M Order: To place a Buy Stop Loss – Market Order at the market. Here only the trigger price Lower than the prevailing market rate can be Specified.

In SELL Orders  4 options are available:

1.Sell Limit Orders will get executed at the Price entered by the user.

Sell Limit Order will get executed at higher than or equal to user given sell limit price, Only if the user given sell limit price is Higher than or equal to the Last Traded Market Price. ELSE?

2. Sell  SL-L Order : To place a Sell Stop Loss – Limit Order where user  can enter the sell limit price and place a stop loss trigger price higher than the actual prevailing last traded market price to prevent the order from executing at loss.

3. Sell Market Order : To place an order at the prevailing market rate. You will not be asked to enter the sell price.

4. Sell  SL-M Order : To place a Sell Stop Loss – Market Order at the market. Here only the trigger price higher than the prevailing rate can be specified.

awaiting for your inputs.

Regards

RK

2

This looks perfect, thanks for positing this, I’m certain it will help many other.

3

Hi RK,

As you mentioned above orders types everything will works accordingly except for SL-M and SL-L orders.

​For placing SL-M order you have to mention Trigger Price and for SL-L  you have to give Price and Trigger the those order won't be get active until unless hit the trigger price which you have given.

Assume SBIN Trading at Rs.300 I am taking this price to define the price for orders

Buy SL-L Order: Here you are minimizing the losses for your open short position you have to give Price higher than to market price i.e.,Price Rs.303 and Trigger Price Rs.302.50 the range you have to define depends on spread of the contract.(Range PRICE is Higher than TRIGGER PRICE)

Buy SL – M Order: Trigger Price is higher than to Market Price you need to give above market price Trigger Price Rs.303

Sell  SL-L Order : Here also you are making losses but you are minimizing the losses for your open long position you have to give the price lesser than to market price i.e., Price Rs.296 and Trigger Price Rs.297(Range PRICE is lower to TRIGGER PRICE)

Sell  SL-M Order : Trigger Price is Lesser than to Market Price that you need to give below market price Trigger Price Rs.295.

this is how stop loss will work.

1 Like
4

Sir, Thanking you for the reply.
Though I have made this order type list and their functions ( collected info from internet and then tweaked the language to make it layman my understandble noob proof sentence.)
But still when I relate this to real market live trading, I get super confuse.
Specially in a case scenario where I want to trade with market direction.
For an example,
long-
Case 1. How do I buy a share which is say currently at 11:30 am trading at 100 but i want to buy it only when it reaches 105 and sell it when it reaches 107.
So at 11:30 how do I buy a share for higher price / between a price range, then its current market last traded price.
Case 2. Buy between 104-105 only, (reason being, to increase the order fill chances)
And sell equal to or Higher then 107,
Here my buying reason for specific price is, it confirms me an upward trend.
Short-
Case 1. Say DLF is trading 150 at 11:30 am and I sense that a downward trend will start at 11:40 am, so I want to place a sell (short) order right now at 11:30 am for 145, and want to buy it when it reaches 140.
Case 2. Sell (short) only between 144-145,
And buy at lower or equal to 140.
Karthik Sir,
Please reply with an elaborate example.
Thanks and Regards
RK

5

Karthik, its high time for you guys to make a video/infographic explaining all order types, all scenarios, how to place Sl and Target,etc. Can you believe Order types are the most basic tenets of trading and you’ve done nothing on that. Was once at the office to get info on the same but it was not great as the guys i met seem to be not fully knowledgeable on the same. Pi, Varsity, Q are all great and advanced. But all this without the above is funny.

6

Check this link - http://zerodha.com/z-connect/tradezerodha/margin-requirements/zerodha-margin-policies

7

Thnankyou for the explanation Manohar Sir.

8

I’m at a loss here. When one is long on a trade why on earth should he buy at a price higher than CMP ??. I’m a noob. please clarify if I’ve raised a silly doubt.

9

Every trader uses different types of analysis to benefit from market and take Buy & Sell decisions according to their strategy. So some will wait for price to move to a certain point before Buying or Selling a stock.

If you want to learn more about markets and technical analysis, just visit Varsity, you will learn a lot more there.

10

Thanks for the reply. I got your point.