Now that we understand the Buy-Stop pending order let’s discuss the Sell-Stop order.
Simply put, Sell-Stop is a pending order that is placed when the trader wants to sell a financial instrument at a specific price.

Commonly, traders place orders to sell a financial instrument in the future when a specific condition is met.
This action is also known as Sell-Stop.
But how does it work exactly?
Say, that after analyzing the price chart, you identify a bearish trend reversal in the making.
What do you do?
Well, you either wait until the reversal is complete so you can place the order, or you place a Sell-Stop order to be executed when a specific condition is met.

For example, after identifying a bullish trend as defined by at least 2 successive higher tops and higher bottoms, you notice that the last top fails to exceed the previous top, and instead, prices decline towards the most current bottom, say 1.3050
In anticipation of a potential fall below the bottom, some traders would place a sell-stop pending at 1.3050 or lower to enter the market with a sell trade and take advantage of the downswing.

When the price eventually falls below the current bottom, then it will potentially open the way for a further decline.
Therefore, Sell-Stop pending orders allow traders to set the conditions for trades to be executed in the future at a lower price without being in front of the screen monitoring the price fluctuations.

This not only gives flexibility to the user but also promotes discipline.
Remember that Sell orders are always executed at the Bid price.
Happy trading!