#OrderTypes101 Here’s a beginner-friendly breakdown of order types in trading (stocks, crypto, etc.). Think of order types as instructions you give your broker or trading platform about how and when you want to buy or sell.
🧾 Basic Order Types
1. Market Order
What it does: Buys or sells immediately at the best available price.
Use when: You care more about getting the trade done quickly than about getting the best price.
Risk: May get a worse price in fast-moving or illiquid markets.
Example: "Buy 10 shares of Tesla right now."
2. Limit Order
What it does: Sets a specific price at which you want to buy or sell.
Use when: You care more about the price than the speed of execution.
Risk: The order might never get filled if the market doesn't hit your limit price.
Example: "Buy Tesla only if the price drops to $600."
3. Stop Order (a.k.a. Stop-Loss)
What it does: Becomes a market order when a specified stop price is hit.
Use when: You want to limit losses or protect profits.
Risk: Once triggered, it executes at the next available price — which could be worse than expected in volatile markets.
Example: "Sell Tesla if it falls to $550."
4. Stop-Limit Order
What it does: Becomes a limit order when the stop price is hit.
Use when: You want to avoid slippage by setting a price floor/ceiling.
Risk: It may not execute if the price moves past your limit.
Example: "Sell Tesla if it hits $550, but only if I can get $545 or better."
⚙️ Advanced Order Types (Quick Glance)
Order Type Description
Trailing Stop Moves the stop price as the asset price moves in your favor.
Fill or Kill (FOK) Must be filled completely and immediately, or not at all.
Immediate or Cancel (IOC) Fills as much as possible immediately, cancels the rest.
Good 'Til Canceled (GTC) Stays active until you manually cancel it.
Day Order Expires at the end of the trading day if not filled.
