#Liquidity101 ## **1. Market Orders**
- **What it is:** An order to buy/sell immediately at the best available current price.
- **Pros:** Guaranteed execution (but not price). Fastest way to enter/exit a trade.
- **Cons:** Slippage risk (price may differ from expected, especially in volatile/low-liquidity markets).
- **When to use:** When speed is priority (e.g., news events, quick exits).
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### **2. Limit Orders**
- **What it is:** An order to buy/sell at a specific price (or better).
- *Buy Limit:* Executes **at or below** the set price.
- *Sell Limit:* Executes **at or above** the set price.
- **Pros:** Control over price; no slippage. Can set profit targets or accumulation levels.
- **Cons:** No guarantee of execution if price doesn’t reach the limit.
- **When to use:** For precise entries/exits (e.g., buying dips, selling at resistance).
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### **3. Stop-Loss Orders (Stop Market)**
- **What it is:** An order to sell/buy **at market price** once a stop price is triggered (to limit losses).
- **Example:** Holding BTC at $60K, set stop-loss at $58K. If price hits $58K, it sells at market.
- **Pros:** Risk management; prevents emotional decisions.
- **Cons:** Slippage can occur during fast moves (e.g., flash crashes).
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### **4. Stop-Limit Orders**
- **What it is:** Combines stop and limit orders. Triggers a **limit order** once the stop price is hit.
- *Stop Price:* Activates the limit order.
- *Limit Price:* Sets the min/max execution price.
