A stop order is a conditional order comprised of a stop trigger price and a regular market or limit order. Once the stop trigger price is reached, a limit or market order will be placed automatically.

In Cornix, we use stop-type orders in case of stop-loss orders, entry orders for breakout trades, and trailing Entry and trailing Take-Profit orders.

Let's say that we bought Ethereum for its market price of $1500 and plan to sell it with a profit if the price increases. To control our risk, if the market trends in the other direction, we will also place a stop-loss order for $1400.

If we place a regular sell limit order for $1400, which is lower than the current market price, our order will get filled immediately at the current market price as it’s a favorable price over our desired stop loss price.

To trigger the sell once the market price drops to $1400, we can use a stop type order with a stop trigger price of $1400. A limit or market order will be triggered when reaching the trigger stop price.

The same concept applies to a buy stop order for a breakout trade. A breakout refers to when the price of an asset moves above a resistance area, for a Long, or below a support area for a Short.

Let's say that we want to buy BTC but only once the price is trending upward. For example, the current market price of BTC is $30000 and we want to place a buy order at the price of $32000.

If we place a regular buy limit order for $32000, which is higher than the current market price, our order will get fulfilled immediately at the current market price as it’s a favorable price over our desired buy price.

To trigger the buy once the market price increases to $32000, we can use a stop type order with a stop trigger price of $32000. A limit or market order will be triggered when reaching the trigger stop price.

Some exchanges allow choosing between market or limit orders to be used when using stop-type orders and some will allow only one of them. In exchanges that allow both, it is needed to set in your auto trading configuration which type of order you want to place after the stop type is reached.

To do so navigate to the stop or advanced section and choose the stop type between market or limit, in case there is no option to choose in the exchange, you won’t have the option to choose it under your configuration.

In case you choose the stop type order to be a limit order then you’ll also need to set a limit price reduction. So for example if we choose a limit price reduction of 5% and a stop loss of 15, then when reaching the stop trigger price of 15, a limit sell order will be placed at 14.95, which is 5% below the stop trigger price of 15.