The buy stop order is a deferred buy order that is set above the current market price. The buy stop order is used in Forex to speculate on currency prices.
For the buy stop order to be really useful, you must set a purchase price according to the volatility of the currency and the time frame you are aiming for.
A buy stop order allows you to open a deferred order. In other words, you set the price at which you want to buy a stock in advance, which will automatically trigger the purchase when the price reaches that value. To execute a buy stop order in your trading station, you select the desired stock and open the order not at the market, but on a delay. You also select a time limit after which the buy stop order expires.
A buy stop order is used to trade Forex. If you are closely following the price of a currency that you think is trending upwards, you can set a buy stop order to automatically trigger a purchase when the price reaches the desired level.
The idea of the buy stop order is to place yourself on a currency where you are not yet sure that the price is going to rise, in order not to miss the beginning of the rise. The Forex market moves very fast : it is difficult to detect an uptrend at the very beginning and, above all, to buy at the bottom without risking a sudden reversal of the price.
In this context, to optimize your use of the buy stop order, it is advisable to place its purchase at the highest price to maximize the profit :
The stop order, also known as a stop loss, involves setting an automatic selling price rather than a purchase price. In this case, the order is executed as soon as the price crosses the threshold set in the stop order. This protects you from a possible loss due to falls in prices that weren’t detected in time. Stop orders are used on all financial markets.
In conclusion, the buy stop order is a deferred buy order set above the market price. It is used for currency transactions on the Forex market. The triggering threshold of the order must be well thought out, far enough from the price if it is volatile and/or if you are aiming for a medium or long term gain.