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So I'm new to the fx market and am a little bit confused. Say I place a buy stop order for EUR/NZD at 1.67451. This price (1.67451) is the ask price or the bid price? That is will the order get triggered when the ask or bid price reaches 1.67451? Conversely, if I place a sell stop for EUR/NZD at 1.67451. This price (1.67451) is the ask price or the bid price?

  • Welcome to personal finance and money stackoverflow! as written your question is a little confusing currently as you seem to have some terms confused. Do you mean a "buy spot " order (which means you want to trade immediately at current price) or a buy order with a stop limit attached to it which will close your position when a certain price is hit to prevent losses getting too large? – MD-Tech Apr 12 at 6:55
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The bid price is what buyers are willing to buy it for. The ask price is what sellers are willing to sell it for.

If you are trying to sell something instantly you would have to take the bid price, if you are trying to buy something instantly you would have to take the ask price.

If you are placing a buy stop order for EUR/NZD at 1.67451 you are placing an order to buy at this price as soon as it is reached by a willing seller.

If buying this would mean as soon as the ask quote hits your order level and there is a willing seller of your pair at that price, if selling it would be when the bid quote hits that line and there is a willing seller for it at that price.

  • I think you’ve described a limit order, not a stop order. As I understand it, a stop order converts to a market order when the price reaches the stop price—that is, when there is actually a trade at (or below) that price, not just when the ask or bid reaches the stop price. – prl Apr 12 at 6:36
  • @prl there is no such thing as a "buy stop" order (although you can attach a stop to a buy order), I think the OP means a "spot" order and either mistyped or doesn't know the difference. – MD-Tech Apr 12 at 6:49
  • @prl actually you may also be right as on rereading I'm not sure what he means now! – MD-Tech Apr 12 at 6:50
  • Of course sell stop orders have been around for a long time—they’re traditionally just called stop orders—they turn into a market sell order when the price reaches the stop price. I thought I read recently about brokers also offering an order that turns into a market buy when the price drops to the stop price. (Brokers offer all sorts of exotic order types now.) But I may have misunderstood it. – prl Apr 12 at 7:27
  • @prl your talking about a limit order and it doesn't "turn into" a market order it just gets executed at or below the limit price. It isn't an exotic order by any means - most professional prop traders don't use anything else as they can earn commissions by being a price "maker" instead of a "taker" – MD-Tech Apr 12 at 9:02

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