Sell limit
Also called Sell limit order, Limit sell, Limit sell order
A sell limit is a pending order to sell at a set price above the current market price. It fills only if the price rises to that level or higher. Traders use it to open a short at a chosen level or to take profit on a long.
With a sell limit, you decide the price before the market gets there. You get a better entry than selling now. In the example below, a sell limit 50 pips above the market cuts your risk from 80 pips to 30 on the same stop. The cost is certainty: if price never rises to your level, you never get into the trade.
Where a sell limit sits against the bid price
A sell order always fills at the bid, the price you can sell at right now. You place a sell limit above the current bid. It waits there until the bid rises to your price. It then fills at your price or a better one.
If you expect a rally to stall at a resistance level, you can set a sell limit there to open a short. Your take-profit on a buy trade is a sell limit, working the same way.
The levels below show a sell limit set to open a short. The protective stop sits above the entry and the target sits below.
Worked example: shorting EUR/USD from a sell limit
The figures here are an illustrative example. EUR/USD is trading at a bid of 1.0950. You think 1.1000 will act as resistance. You place a sell limit at 1.1000 for 1 mini lot (10,000 units). You set a stop loss at 1.1030 and a take profit at 1.0940.
On EUR/USD, one pip is 0.0001. On a mini lot, one pip is worth 10,000 × 0.0001 = $1.
The calculation below shows the distance, risk and target.
Say you sold at the market instead, at 1.0950, with the same stop and target. The table compares the two trades.
| Order | Entry | Risk to 1.1030 stop | Target at 1.0940 | Reward-to-risk |
|---|---|---|---|---|
| Sell limit | 1.1000 | 30 pips ($30) | 60 pips ($60) | 2:1 |
| Market sell | 1.0950 | 80 pips ($80) | 10 pips ($10) | 1:8 |
The trade-off: if the bid peaks at 1.0995 and then falls, the order never fills. You miss the whole move. The chart below shows that miss, and a second rally that does reach 1.1000 and fills the order, because the sell limit was still working.
Sell limit, sell stop and sell stop limit compared
These order types are easy to mix up. The price you enter relative to the market decides which one you need.
| Order | Placed | Fills when | Typical use |
|---|---|---|---|
| Sell limit | Above the bid | Bid rises to the price or higher | Sell into a rally, take profit on a long |
| Sell stop | Below the bid | Bid falls to the price | Sell a breakdown, stop loss on a long |
| Sell stop limit | Stop price below the bid. On some forex platforms the limit price sits above the stop price; on share exchanges it sits at or below it. Many forex platforms do not offer this order | Bid falls to the stop price, then a sell limit waits at the limit price | Sell a breakdown on a pullback (some forex platforms) or without filling far below your level (shares) |
| Buy limit | Below the ask | Ask falls to the price or lower | Buy a dip |
A sell stop limit has one risk the others do not. Once the stop price is hit, it only becomes a sell limit. If price keeps falling and never comes back to the limit price, the order is left unfilled while the market moves away.
Setting a sell limit in the order window
Open a new order and pick the pending order type "Sell Limit". Enter the trading volume, the entry price, a stop loss and a take profit. Many platforms also ask for an expiry. You can choose "good till cancelled" or a set date and time.
If the price you enter is below the current bid, the platform will usually reject the order. Below the bid, you need a sell stop. Some brokers also set a minimum distance between the current price and a pending order.
Share-dealing apps call this a "limit sell". It works the same way: it is the lowest price you will accept.
Checks before you leave a sell limit working
- Stop loss attached. If price breaks through your level, the order fills and you are short into a rally.
- Exits trigger on the ask. Your entry fills on the bid. On a short, the stop and target fill on the ask, the price you buy at, which most charts do not draw. A wider spread can hit your stop even when the chart never touched it.
- Breakout rule. If price closes firmly above your level before your order fills, think again about your idea. Cancel the order if the resistance has failed.
- News and weekends. A gap up through your level fills at the better price, but the move behind the gap may keep going.
- Margin on fill. Check that you will have enough free margin when the order turns into an open position.
- Old orders. Delete orders you no longer want. A forgotten sell limit can open a trade weeks later.
FAQ
Why did my sell limit not fill when the candle touched my price?
Your broker's bid may have peaked a fraction below the level shown on a different price feed. Your broker's chart is normally drawn from the bid, so if your own broker's candle touched the level, the order should have filled. Check whether you were looking at another broker's chart or website. Set the order a pip or two below the exact level if you must be filled.
Do I pay anything while a sell limit is waiting?
An unfilled order is not a position. You pay no spread and earn no profit or loss until it fills. Overnight swap only starts once you hold an open trade.
What happens to my sell limit if only part of my order can be filled?
It depends on your broker's fill policy. Some fill the whole order or nothing. Others fill what they can: that part becomes an open short, and the rest stays as a pending order until it fills, expires or you cancel it.