Order types: market, limit, and stop orders
Three instructions that cover nearly every entry and exit. What each guarantees, what each risks, and when to use which.
Pas encore disponible dans votre langue — version anglaise affichée.
Market orders buy certainty of execution
A market order says "fill me now at the best available price." It guarantees you get into (or out of) the position immediately, but guarantees nothing about the price — in thin books the fill can land far from the quote you saw. Use market orders when being in the trade matters more than the exact entry.
Limit orders buy certainty of price
A limit order says "fill me only at this price or better." You control the worst price you accept, but the market may never come to you — the order can sit unfilled while price runs away. Use limits when the level matters more than immediacy: entries at support, exits at targets, anything placed in advance.
Stop orders automate the exit you promised yourself
A stop order rests dormant until price touches your trigger, then becomes a market order. It exists for one job: cutting a loser while you still can. Place it at the same moment you enter — a position without a predefined exit is not a trade, it is a hope.
The honest limitation: in a violent move, a stop fills below its trigger. That slippage is the price of the guarantee that you are out. Size positions so the worst realistic fill still leaves you solvent.
Risk note: cryptocurrency trading, leveraged perpetual futures, and automated algorithmic strategies carry significant risk of rapid and total financial loss. Never risk funds you cannot afford to lose completely. Nothing in this lesson is investment advice, a recommendation, or an offer to sell any product.
Checklist
- I can state what a market order guarantees and what it does not
- I know when a stop order becomes a market order