L1.2 — Limit Orders vs Stop Orders at Structure

A limit order is placed at a specific price with the intention of being filled when price returns to that level. At a structural support zone, a buy limit is placed at or near the zone to capture the anticipated bounce. The advantage: you get filled at your intended price. The risk: price may blast through the level without a bounce, and you are now long into a structural break.

A stop entry (buy stop above a swing high, sell stop below a swing low) waits for price to break a defined level before entering — typically used for BOS-continuation trades. This entry model requires price to prove the break before you participate. The disadvantage is slippage and potentially entering at a worse price than the initial break candle offers.

A market order is used when precision matters less than speed — for example, entering at the open of a strong momentum candle after a confirmation close. Market orders should be the exception, not the default. The habit of market-ordering every entry removes the discipline of waiting for a defined price and degrades long-term execution quality.