#OrderTypes101 Let's take a closer look at each of them and compare.

What is a stop-loss?

A stop-loss is an order to sell an asset at market price. You set the price at which you want to sell the asset to avoid a significant loss. When the value of a financial instrument approaches the value you need, the order will be executed at the market price closest to the value you set.

With a stop loss, it is possible for the trade to slip and execute at an undesired price if it does not reach the value you need.

Example of stop-loss

The trader bought the asset for a price of 270 cubic feet. To protect against losses, he placed a stop-loss order at 265 yuan. When the quoted price reaches this limit, the asset will automatically be put up for sale and sold at the price of 265 cubic feet, or close to it, if there is no such offer in the market, for example, 264.5 cubic feet.

What is a stop limit?

By setting a stop limit, there is no slippage. The currency will be sold at the exact price you set, but if the market value does not touch this value, the stop limit will not work. That is, a situation may arise where there is no counterparty willing to buy the asset at your price. This often happens when prices drop rapidly.

Examples of stop limit orders

The trader bought a currency for 250 euros. He decided that he would sell it if the price dropped to 245 euros and placed a stop limit order. When the value of the asset reaches 245 USD, the order will be executed automatically. If the price does not reach this level but, for example, drops to 244 cu, passing the mark of 245 cu, the stop limit will not work. The trader will suffer a greater loss than expected.

Differences between stop loss and stop limit orders

1. The stop-loss always executes, but there is no guarantee that this will happen at the expected price. $BTC