Orders: Limit Orders, Stop Losses & Halts

Level: Beginner · About 15 min · 7 slides

Orders are how you control risk. A stop loss automatically exits a losing trade at a level you choose. A buy stop limit enters a breakout without overpaying. And when a stock moves too fast, the exchange can pause it. Here's how each one works.

🔑 Key takeaways

• Set your stop at entry, every trade (Coach's Rule 5).
• Stop market = fast but can slip. Stop limit = price control but may not fill. Trailing = locks in gains.
• Size from the stop: shares = risk $ ÷ (entry − stop). Risk 1–3% of your account.
• A buy stop limit triggers at the stop and won't pay more than the limit.
• LULD pauses trading for 5 minutes if price sits at its band for 15 seconds.

✅ Your homework

1. In paper trading, place a stop market, a stop limit and a trailing stop on one position.
2. Size a trade: $10K account, 1% risk, entry $50, stop $49. How many shares?
3. Place a buy stop limit above today's high on a watchlist stock.
4. Bookmark the Nasdaq Trader trade-halts page and check it during the next big move.

📎 Resources

• Nasdaq Trader trade halts: nasdaqtrader.com/trader.aspx?id=tradehalts
• LULD Plan: luldplan.com
• FINRA: Guardrails for market volatility
• How to enter a stop: Webull (youtube.com/watch?v=WeRt7AtNbvw), Robinhood (learn.robinhood.com), Fidelity, Schwab (schwab.com/content/how-to-place-stop-limit-order), Interactive Brokers (interactivebrokers.com/en/trading/orders/stop.php), E*TRADE
• Investopedia: Buy stop limit
• ADT Academy: https://americandreamtradingacademy.com