Futu Stop-Loss Limit Order Tutorial: 3 Major Auto-Order Features to Help You Lock in Profits

Many investors have a keen eye for stock selection, correctly identifying trends and choosing the right companies—but their final account returns are often less than ideal, or even result in losses. The root cause is often not a lack of analytical ability, but rather emotional influences that lead to deviations from the original plan during execution. However, when you learn to use Futubull’s three practical automatic order features—stop‑loss limit orders, conditional limit orders, and either/or orders—you can effectively lock in profits, control risks, and boost investment efficiency!

What is a take-profit/stop-loss limit order?

In the investment process, even when market trends are accurately predicted, many investors ultimately fail to achieve their expected returns. The main reason is that they fail to execute buy and sell decisions strictly according to the original plan. Whether it’s harboring higher profit expectations during periods of gain (greed), being reluctant to exit promptly during losses (fear), or missing the optimal timing due to work commitments, all can negatively impact performance.

Take-profit and stop-loss limit orders are the perfect tools for addressing this issue. You simply set a “trigger price” and an “execution price” in advance. Once the stock price reaches the trigger level, the system automatically submits a limit order. This allows investors to reduce emotional interference while eliminating the need to monitor the market constantly.

Example of Take Profit and Stop Loss Limit Orders

To help everyone better understand, the following provides common examples of take-profit and stop-loss limit orders, covering both stop-loss and take-profit scenarios:

Scene 1: Overcoming the “Unwillingness to Admit Defeat” Mentality (Cutting Losses)

You’ve selected a stock and plan to hold it for the medium to long term, with the original strategy being to “cut losses and exit if the stock price falls by 10%.”

• When no order is set: When the stock price falls by 5%, you think it’s just a temporary correction; when it drops to 10%, you believe it might rebound soon. But as the decline widens, what started as short-term trading turns into a long-term hold, and losses only deepen.

• Use stop-limit orders: Set a trigger price in advance, and the system will automatically execute a sell when the conditions are met. This enforces discipline, limits losses, and helps preserve your capital.

Scenario 2: Avoiding “Turning Profit into Loss” (Taking Profits)

The stocks you hold have accumulated a certain amount of unrealized profit, and your original plan was to “take profits once the gain reaches 20%.”

• When no order has been set: As the stock price approaches your target, you start to hesitate, thinking, “The rally isn’t over yet—there might still be room to run.” But just as quickly, the stock price reverses, causing your unrealized gains to shrink dramatically or even turn into losses.

• Use a take-profit limit order: Once the price reaches the target, the order is executed, converting the potential profit into actual gains.
  
  *Limit orders are provided for illustrative purposes only; in actual trading, you can choose between market orders or limit orders based on your specific investment needs.

Other Useful Orders: OCO Orders (One of Two Orders)

You can also set both take-profit and stop-loss orders simultaneously to create an OCO order (one‑of‑two order). Once either order is triggered and executed, the other order will be automatically canceled.

This strategy is particularly well suited when you’re uncertain about future market trends or when a major event is imminent—such as an earnings release or the publication of economic data. Whether the stock price breaks upward or retraces downward, you can execute according to your pre‑established plan without needing constant monitoring, thereby avoiding missed opportunities due to hesitation.

Managing Volatility Before Option Expiration

Option trading—especially as expiration approaches—is characterized by rapid time value decay, high volatility, and volatile liquidity, which can easily amplify emotional influences. Even if you correctly predict the direction of price movement, delayed execution may cause you to miss out on profits or even exacerbate losses.

For example, after purchasing an at-the-money option, if the stock price rises and the premium increases, but due to hesitation or failing to monitor the market in a timely manner, the premium may fall back—or even drop to zero. Such situations are common when time pressure mounts or liquidity fluctuates.

Futu’s OCO orders (two‑in‑one combination orders) allow you to set both take-profit and stop-loss simultaneously: for example, a take-profit trigger price (when the premium reaches $1.2) and a stop-loss trigger price (when the premium falls to $0.5). Once triggered, the order is executed as a market order, ensuring rapid execution.

The benefits of this combination:

• Lock in your profit‑loss threshold when you open a position, letting the system take over emotional decision‑making.

• To pursue transaction speed, market orders are suitable for environments characterized by volatile price movements and fluctuating liquidity.

• Automate processes to reduce the pressure of monitoring markets.

Suitable for use before any major event (such as earnings reports or Federal Reserve interest rate meetings), helping to manage risk in a rational manner.

Risk Warning: Options are high‑risk products, and even using OCO orders cannot fully offset drastic price fluctuations in the underlying asset. We recommend maintaining prudent position sizes and avoiding excessive leverage. While market orders triggered after the event ensure speed, they may incur slippage, especially as expiration approaches when liquidity tends to be thin. Avoid setting orders too late to prevent a lack of liquidity at the close of trading, which could result in failed executions.

Advanced Practical Order: Trailing Stop Limit Order

If you want to both allow your floating profits to continue growing while also protecting your accumulated gains in a rising stock price trend, a trailing stop limit order is the more suitable tool.

For example, after you purchase a growth stock, the share price keeps rising. On the one hand, you want to continue holding the stock to let your profits grow; on the other hand, you worry that a sudden pullback might wipe out part of your gains. In this situation, you can set a trailing stop order with a specified drawdown percentage (such as 5%). The system will use the highest price at that moment as the benchmark and automatically calculate a dynamic trigger price—for instance, the order will be triggered when the highest price falls by 5%. As long as the stock price continues to hit new highs, the trigger price will move upward in tandem; once the trend reverses and hits the trigger price, the order will be executed automatically, helping you lock in most of your profits and exit the position.

For tutorials on how to use various order types, please click.“Why Do You Always Earn Less Than Others? It Might All Come Down to How You Use These Orders!”

Advantages of Setting Orders: Let the System Automate Your Plans! Once you’ve set your orders, Futu’s system takes over trade execution, eliminating the need for constant monitoring. You can entrust pre‑designed plans to the platform, preventing missed executions due to emotional hesitation or unforeseen events, helping you maintain trading discipline and reduce potential losses.

“Conditional Limit Orders” Help You Strike with Precision

Many investors are accustomed to using plain limit orders when planning to enter the market, but this can lead to hidden problems. For example, before the morning session, you expect Tencent to fall back to HK$600 before buying, so you place a plain limit order at HK$600. However, the stock price never reaches that level, leaving your capital idle all day and causing you to miss other opportunities—such as a sudden surge in Meituan’s stock price.

Conditional orders (which submit limit orders upon triggering) are perfectly suited to handle this kind of situation. At their core, they work by “waiting for a specific signal to be confirmed before entering the market at a designated price.” Orders are only automatically submitted when the specified conditions are met, while funds remain freely available until the trigger occurs.

The following are some common use cases:

1. Wait for the price to break above or below a key level, then precisely follow the trend.
For example, a certain stock is currently trading at $98 and has been oscillating within this range for a long time, with strong resistance at $100. You’re hesitant to buy at the current price (for fear of a pullback), but you believe that once the stock breaks above $100, an upward trend will begin. In this situation, if you place a regular limit order at $100, the system may execute the order immediately due to the low current price, thereby negating the purpose of “waiting for the breakout.” Instead, you can set up a conditional order: the trigger condition is “stock price ≥ $100.1” (to confirm the breakout), and after the trigger is activated, submit a limit order to buy at $100.5. This approach avoids entering the market before the breakout is confirmed while allowing you to enter at a more favorable price once the trend is validated.

The same approach applies to stop-loss orders placed below support: If you bought the stock at $60 and identify $48 as key support—believing that a break below this level could trigger a sharp decline, but wary of being triggered by short‑term volatility—you can set a conditional order: When the stock price falls to or below $48, automatically submit a limit sell order at $47.8. This order will only be executed if the price actually breaks down, helping you avoid premature liquidation and missing out on a subsequent rebound, while the limit price also reduces the risk of slippage.

2. Optimize trading timing to address the inconvenience of constantly monitoring markets and the emotional impulse to chase trades.
For example, if Meituan receives positive news over the weekend, it’s expected to open significantly higher on Monday. You don’t want to chase higher prices blindly, but you’re also afraid of missing out on the rally, so you plan to “buy once the stock price fills the gap to HK$101, 15 minutes after the market opens.” However, during that period, you have other commitments and can’t monitor the situation. In this case, you can use a conditional order to set the trigger condition as “stock price ≤ HK$101” and add a time limit—allowing the system to execute automatically, thereby avoiding irrational volatility in the early trading session while enabling flexible use of your funds before the conditions are met.

Conditional orders are like smart assistants, helping you monitor signals and only acting at critical moments, enabling more rational trading while allowing you to allocate your capital and time to other opportunities.

Risk Warning: When using conditional limit orders, be sure to leave a reasonable buffer between the trigger price and the desired price. For securities with low liquidity, you may encounter situations where, after the order is triggered, it cannot be executed at the specified limit price. We recommend prioritizing securities that trade actively. The order’s validity period should align with your trading strategy—avoid setting “Good ‘Til Day” only to miss overnight market movements, or setting “Good ‘Til Cancellation” and thereby tying up capital for an extended period.

Summary: Enhancing Transaction Execution – From Strategic Planning to Systematic Implementation

Investment success depends not only on selecting the right stocks, but also on effectively managing risk and return. By using Futu’s stop-loss limit orders to manage risk boundaries, trailing stop-loss limit orders to let profits grow, and conditional orders and OCO orders to respond to different market conditions, you can turn your strategies into systems that can be executed sustainably.

By making effective use of these automation tools, you can reduce emotional interference, maintain trading discipline, and thereby focus more on realizing long‑term value.

Risk Warning: Avoid setting stop-loss or take-profit levels that are overly aggressive: If the stop-loss price is set too tightly, it may be triggered by normal market fluctuations; if the take-profit price is set too high, you may never reach your target. We recommend setting these levels based on the recent trading range of the underlying asset or key support and resistance levels. When configuring trailing stop orders, avoid setting parameters that are either too loose or too tight—instead, consider using the stock’s average daily volatility over the past period as a reference. However, this process itself may involve trial-and-error costs. Before an order is executed, be sure to double-check all parameters to prevent unnecessary losses caused by errors such as reversing the buy/sell direction or entering the wrong trigger price. Options themselves are inherently high‑risk instruments; even using a one‑of‑two combination order cannot fully offset the risks associated with sharp price swings in the underlying asset. We advise limiting position sizes and avoiding reckless leverage. While choosing a market order after a trigger can ensure rapid execution, it may result in some slippage, especially as expiration approaches and liquidity becomes extremely thin. Don’t wait until too late to place your orders—doing so could lead to complete liquidity exhaustion at the close of trading, leaving your orders unfilled and exposing you to the risk of losing your entire premium.