#OrderTypes101: Market, Limit, Stop – Know Your Orders Before You Trade

In crypto trading, placing the right type of order can make the difference between success and frustration. Whether you're buying the dip or locking in profits, it’s essential to understand how different order types work.

Let’s break down the most common ones: 👇

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🟢 1. Market Order

What it is: An order to buy or sell immediately at the best available price.

Use it when: Speed is more important than price.

Pros: Fast execution

Cons: You may get less favorable prices during volatility (slippage)

💡 Example: You want to buy BTC right now. You place a market buy, and the order fills instantly at the best ask price available.

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🟠 2. Limit Order

What it is: An order to buy/sell at a specific price or better.

Use it when: You want control over the price, even if you have to wait.

Pros: Avoids slippage; good for setting entry/exit targets

Cons: May not fill if the market doesn’t reach your price

💡 Example: BTC is trading at $68,000. You set a limit buy at $66,000. The order only executes if BTC drops to that price.

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🔴 3. Stop-Loss Order (Stop Market)

What it is: An order that gets triggered when the price hits a certain level (the “stop” price), then executes as a market order.

Use it when: You want to cut losses automatically.

Pros: Helps manage risk

Cons: During fast drops, execution may be below your stop price

💡 Example: You bought ETH at $3,800. You set a stop-loss at $3,500 to protect your capital if it dips too far.

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⚙️ 4. Stop-Limit Order

What it is: Similar to a stop-loss, but it places a limit order (not a market order) when the stop price is hit.

Use it when: You want to sell on a breakdown, but only at or above a certain price.

Pros: More price control

Cons: May not fill in fast-moving markets

💡 Example: Stop at $3,500, limit at $3,480. If ETH falls below $3,500, your order activates but will only fill at $3,480 or better.

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