#OrderTypes101 Understanding different order types is essential when trading in any financial market—including stocks, crypto, forex, or commodities. Here's a beginner-friendly overview of the most common order types:

🧾 Order Types 101

1. Market Order

What it does: Buys or sells an asset immediately at the best available price.

Use case: When you want to get in/out fast and don't mind slight price changes.

Risk: You may not get the exact price you see due to slippage.

✅ Example: "Buy 1 BTC at the current market price."

2. Limit Order

What it does: Buys or sells only at a specified price or better.

Use case: When you want to control the price you're paying or receiving.

Risk: Your order might not get filled if the market doesn’t hit your price.

✅ Example: "Sell ETH only if the price reaches $3,000."

3. Stop Order (Stop-Loss Order)

What it does: Becomes a market order once a trigger price is reached.

Use case: To limit losses or protect profits.

Risk: Once triggered, it executes as a market order, which might lead to slippage.

✅ Example: "Sell BTC if it drops below $58,000."

4. Stop-Limit Order

What it does: Becomes a limit order after reaching the stop price.

Use case: Combines stop-loss protection with price control.

Risk: May not be filled if the market moves too fast past your limit price.

✅ Example: "If BTC falls to $58,000 (stop), sell it at no less than $57,900 (limit)."

5. Trailing Stop Order

What it does: Sets a dynamic stop that follows the price by a fixed percentage or amount.

Use case: To lock in profits while letting gains run.

Risk: Can be triggered by short-term volatility.

✅ Example: "Sell BTC if it falls 5% from its highest price since order placement."