Ughh. I just can't seem to wrap my head around limit and stop limit orders. ELI5?

good q

/remind me !remind me

Not quite. Here’s a discussion and example using those numbers.

Limit order: The limit price is just a price you’re offering to sell for. So if the market price is currently $214, you could create a limit sell order for $219. It will sit there until somebody wants to pay $219. If you set that limit order at $213.50, it would sell right away, because there are buyers with limit buy orders already out there at prices below the current market price of $214.

When you set the limit sell order for $219, you become a seller sitting out there offering to sell when it gets that high. If you look at the order book (the list of changing prices on the page where you place your order), that’s all limit orders that people have created. If you go to the chart page, at the bottom you can see the fluctuating mountains of the buy and sell side, and if you click on any part of it, it gives you an idea of how many people, relatively, have limit orders to buy (on the green side) and sell (on the red). They meet in the middle at the current market price. Of course, they increase in size as you move away from the middle, because there are more buyers willing to pay lower prices, and more sellers willing to sell for higher prices.

Stop-limit order: Stop-limit is an order you set to protect against losses. Let’s say you think it might go down and you want to sell at $210 before/in case it goes lower than that. If you just created a limit sell order (as above) to sell for $210, it would get taken immediately, because the current price is $214, and there are already plenty of buyers on that green mountain who have orders waiting to scoop up offers at $210, and of course they’d take it immediately because it’s a discount.

So, you use a stop-limit sell order. You think, ok, if the price gets down to $210, I want to sell before it goes even lower. However, the market moves fast, so fast it could quickly move below $210. So maybe when the price is $210.05, you should put yours up for sale at $210.00. This is the two parts of the stop-limit sell order. The stop price is $210.05. It’s the “trigger” that says it’s time to put my tokens up for sale. It triggers your limit order to sell at a price of $210.00.

The 5 cent difference I used above for the stop and limit in the stop-limit are just an example. How far apart you set them is up to you. Look at the prices on the order book, and see how much they change for an idea of how far apart to set them. It could be $0.0001, or it could be $0.25 (although for something like XRP Its prob safe to make it less than a penny). In theory, you could set them the same, but IMO it’s not worth missing it and losing a bundle more because the market price moved so quickly past your stop.