#OrderTypes101 In trading, various order formats are used depending on the conditions, goals, and current market situation. Below are the most common types of orders.

Market Order

This is an instruction for immediate execution of a transaction at the best available price. This format is suitable in situations where speed is prioritized over price. It is used during high market volatility when it is important to enter or exit a position immediately.

Example: if an asset is trading at $100, a market order to buy is executed instantly at the current or nearest available price.

Limit Order

This is a request for a transaction at a predetermined price, which is executed only when the quotes reach the specified level. This approach allows for control over the entry or exit price but does not guarantee execution.

Example: a trader wants to buy an asset for $95 when the current price is $100. They place a limit order that will be executed only if the price drops to $95.

Stop Order

Activated when a specified level is reached and then converted into a market or limit order. This type is used for automatically closing a position to limit losses or secure profits.