#OrderTypes101

Market Order: This is an Order Type where by a trading instruction is made and is often executed automatically at once using the prevailing market rate of he price of a token. This is type of order is executed fast and in a timely manner without much emphasis on the price of a coin or token when buying or selling. Example is placing a sell order for #BTC at $106,000 during a small rally.

Limit Order: This is an Order Type where by a trading instruction is made and is often executed at a specific pre-set price for a token. This type of order is executed much slower when compared to a market order as a trader will have to wait for prices to hit specific pre-set target in order for their buy or sell orders to get filled. The major advantage of this type of order is that it guarantees selling at a specific price and is important when trading a volatile token or trading pair. Example is placing a buy order for for Ethereum at $2200 during a small market dump.

Stop-Loss Order: This is an Order Type where by a trader places an instruction for a token to sell automatically and a trade closed when price drops below a pre-set value. A Stop-Loss Order is often implemented as a major risk management tool during a trading episode. This is especially useful to prevent further loses when a trade begins to go bad to avoid liquidation or complete loss of trading funds.

Take-Profit Order: This is also a type of Limit Order where an instruction is place for an order to be executed when prices hit a specific target. The purpose of a Take-Profit Order is to lock in profits and gains made during a trading episode.

My favourite Order Type for Spot trading is the use of Limit Order but placing a Market order may come in handy during Futures trading when you'd like to trade for volume. And sometimes a trader may need to use a combination of all the Order Types mentioned above.

And If you're trading today, I hope you do so profitably.

Cheers!