This post is only for beginners. If you are an experienced trader, you can skip it.
When you're trading on Binance or any other exchange, you’ll come across options like Limit, Market, Stop-Limit, Stop-Market, Trailing Stop, OCO, and Algo Orders. These terms can seem confusing at first, but once you understand them, everything becomes easier.
Imagine you're trading Binance Coin (BNB), and the current price is $500.
Limit Order
A Limit Order allows you to buy or sell at a specific price. Suppose you want to buy BNB only if the price drops to $480. You place a Limit Buy Order at $480. If BNB’s price reaches $480, your order is filled. If it doesn’t, your order stays open. This is useful when you want to wait for a better price rather than rushing into a trade. It’s great for patient traders who want control over their entry or exit prices.
Market Order
A Market Order buys or sells immediately at the current price. Let’s say you want to buy BNB right now while it’s at $500. You place a Market Buy Order and get BNB instantly at the best available price. This is useful when speed matters more than getting the perfect price, especially in fast-moving markets.
Stop-Limit Order
A Stop-Limit Order combines a stop price and a limit price. You bought BNB at $500, and you want to protect yourself from big losses. You set a stop at $480 and a limit at $478. If BNB hits $480, a Limit Sell Order at $478 is placed. But if the price drops too quickly below $478, your order might not fill. This is useful when you want to manage your risk but still have control over the minimum price you’re willing to sell at.
Stop-Market Order
A Stop-Market Order is similar to Stop-Limit, but instead of placing a limit order, it places a Market Order once your stop is hit. Suppose you set a stop at $480 for your BNB. If it hits, it sells immediately at the market price. This is useful when you need to exit fast and don’t want to risk your limit order not filling during a rapid drop.
Trailing Stop Order
A Trailing Stop Order lets your stop price follow the market upward. If BNB is at $500, and you set a 5% trailing stop, and the price rises to $550, your stop price moves to $522.5. If BNB then drops to $522.5, it sells. This is useful for locking in profits automatically while letting your trade grow. It saves you from having to adjust stops manually.
OCO (One Cancels the Other)
OCO lets you place two orders at once: one to take profit, and one to cut loss. If you bought BNB at $500, you can set a sell order at $550 (profit) and another at $480 (loss). If one is triggered, the other cancels. This is useful when you want a clear exit plan in both directions and don’t want to miss out while you’re away from your screen.
Algo Orders
Algo Orders are automated trades based on custom rules, like buying when RSI is low. These are not for beginners and often not available in basic spot trading. This is useful for experienced traders who want to follow a rule-based system without emotional decisions. If you are new, don't try it.
I have tried to keep it simple and understandable, however, if you still have any confusion ask me in comment section.
Disclaimer: My name is Aamir, and I’m here to teach what I’ve learned through experience. This is the knowledge blessed to me by Allah Almighty. I am not an influencer, I don’t need your likes or followers—I just want you to truly learn and understand what I share. I am a spot trader, and share my personal trades here. But remember: you trade at your own risk. Start simple. Practice with small amounts. Don’t use any feature blindly unless you fully understand it. With time, these order types will become powerful tools to protect your money and increase your profits.
Trade smart. Stay safe.
