#OrderTypes101 There are two main types of pending orders: stop order and limit order, which are further divided depending on the type of transaction (buy or sell). As a result, we get 4 orders with different execution mechanics.

Buy Limit — used when there is a need to buy an asset at a price lower than the current one.

Often useful within the framework of a 'pullback' strategy, when a trader lowers the price to a certain level with a subsequent recovery;

Sell Limit — applied to sell above the market price. Useful when the goal is to lock in profit if the asset rises to a certain level;

Buy Stop — this is a buy order above the current price, which is activated when a specified level is reached. Used when expecting an impulsive rise — for example, if the price breaks through a resistance level;

Sell Stop — a sell order below the current price. Used to limit losses or during trading when breaking through a support level.

To visually understand the difference between a limit and a stop order, let's consider the same transaction using different instruments.