<h2>Stop-Limit Order</h2>
<p>A <strong>stop-limit order</strong> is a type of order used in trading that combines the features of a stop order and a limit order. It is designed to help traders manage risk and automate trades at a specified price level.</p>

<h2>How It Works</h2>
<p>A stop-limit order consists of two parts:</p>
<ul>
  <li><strong>Stop price</strong>: This is the trigger price at which the order will be activated. Once the market price reaches this level, the order converts into a limit order.</li>
  <li><strong>Limit price</strong>: This is the price at which the order will be executed. The trade will only be executed if the market price reaches the limit price after the stop price has been triggered.</li>
</ul>
<p>Here's how it works:</p>
<ol>
  <li>The trader sets a stop-limit order with a stop price and a limit price.</li>
  <li>When the market price reaches the stop price, the order is triggered and converted into a limit order.</li>
  <li>The trade will only be executed if the market price reaches the limit price. If the market price does not reach the limit price, the order will not be executed.</li>
</ol>

<h2>Why It Matters for Traders</h2>
<p>Using a stop-limit order can provide traders with several benefits:</p>
<ul>
  <li><strong>Risk management</strong>: By setting a stop price, traders can limit their potential losses if the market moves against their position.</li>
  <li><strong>Price control</strong>: The limit price allows traders to have more control over the price at which their order is executed.</li>
  <li><strong>Market gaps</strong>: Stop-limit orders can help traders avoid being filled at unfavourable prices during market gaps, which can occur due to news events or other sudden market movements.</li>
</ul>

<h2>Example</h2>
<p>Let's say a trader wants to buy EUR/USD at a price of 1.2000, but they want to limit their potential loss to 50 pips. They place a stop-limit order with a stop price of 1.1950 and a limit price of 1.1949. If the market price reaches 1.1950, the order is triggered and converted into a limit order. The trade will only be executed if the market price reaches 1.1949. If the market price does not reach 1.1949, the order will not be executed, and the trader's potential loss is limited to 50 pips.</p>

<h2>Key Takeaways</h2>
<ul>
  <li>A stop-limit order combines the features of a stop order and a limit order.</li>
  <li>The stop price triggers the order, and the limit price determines the execution price.</li>
  <li>Using a stop-limit order can help traders manage risk and control the price at which their order is executed.</li>
  <li>Stop-limit orders are available on platforms like <strong>MetaTrader 5</strong> and can be used to trade a wide range of instruments, including forex, commodities, and indices.</li>
</ul>