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New to this trading thing.

I understand that a stop order will buy a stock if it hits the given amount that I want to pay.

And I think I understand that a stop limit order will buy the stock if it hits the given price but then goes higher before the trade is completed within the given threshold.

Is this correct and if so is there a benefit to not going with a stop limit order?

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Stop order is shorter term for stop-loss order. The point being that is intended as a protective measure. A buy stop order would be used to limit losses when an investor has sold a stock short. (Meaning that they have borrowed stock and sold it, in hopes that they can take advantage of a decline in the stock's price by replacing the borrowed stock later at a cheaper price. The idea is to limit losses due to a rising stock price.) Meanwhile, a sell stop order would be used to limit losses on a stock that an investor actually owns, by selling it before the price declines further.

The important thing to keep in mind about stop orders is that they turn into market orders when the stop price is reached. This means that they will be filled at the best available price when the order is actually executed. In fast moving markets, this can be a price that is quite different from the stop price.

A limit order allows an investor to ensure that they do not buy/sell a stock at more/less than the specified amount.

The thing to keep in mind is that a limit order is not guaranteed to execute.

A stop-limit order is a combination of a stop-loss order and limit order, in that it becomes a limit order (instead of a market order) when the stop price is reached.

Links to definitions:

Stop order
Stop-limit order
Limit order
Market order

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An attempt at a simple answer for the normal investor:

A normal investor buys stock then later sells that stock. (This is known as "going long", as opposed to "going short"). For the normal investor, a stop order (of either kind) is only used when selling.

A stop-loss sell order (or stop sell) is used to sell your stock when it has fallen too much in price, and you don't want to suffer more losses. If the stock is at $50, you could enter a stop sell at $40, which means if the stock ever falls to $40 or lower, your stock will be sold at whatever price is available (e.g. $35).

A stop-loss limit sell order (or stop limit sell) is the same, except you are also saying "but don't sell for less than my limit price". So you can enter a stop limit sell at $40 with a limit of $39, meaning that if the stock falls to $40, you will then have a limit order in effect to sell the stock at $39 or higher. Thus your stock will never be sold at $35 or any value below $39, but of course, if the stock falls fast from $40 to $35, your limit sell at $39 will not be done and you will be left still owning the stock (worth at that moment $35, say).

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