An order is your instruction to the broker. A is filled right away at the next price. A caps the price. A only becomes active at a set level, a combines both. The difference shows most clearly with a .
Price or fill
A market order is almost always filled, but the price is not fixed in advance. A limit order caps the price (your limit or better), but is only filled if the market reaches your limit – and in reality even a mere touch does not always lead to a fill. Buy limit means: at this price at most. Sell limit means: at this price at least.
Stop orders and price gaps
A sell stop is triggered when the price reaches or falls below the level, and is then filled like a market order. If the price already opens below it, the sale happens at the open – so worse than the level. A stop-limit order prevents that, but may then stay unfilled.
How our backtest calculates
In the backtest of our rule, the entry happens at the open after the close above the swing high, i.e. like a market order. The stop is calculated like a stop order: if the price opens below the stop, the opening price applies. Fees and come on top.