#OrderTypes101
# **Order Types 101: A Beginner’s Guide to Trading**
Understanding order types is essential for executing trades effectively. Here’s a simple breakdown of the most common ones:
### **1. Market Order**
- Buys/sells instantly at the **current market price**.
- **Pros:** Fast execution.
- **Cons:** May suffer from slippage in volatile markets.
### **2. Limit Order**
- Sets a **specific price** to buy or sell.
- **Buy Limit:** Executes only if the price **drops** to your target.
- **Sell Limit:** Executes only if the price **rises** to your target.
- **Pros:** Price control.
- **Cons:** No guarantee of execution.
### **3. Stop-Loss Order**
- Automatically sells an asset if the price **falls below** a set level.
- Helps **limit losses** in a downtrend.
### **4. Take-Profit Order**
- Closes a trade when the price **hits a profit target**.
- Locks in gains before the market reverses.
### **5. Stop-Limit Order**
- Combines **stop-loss + limit order**.
- Triggers a limit order only after a stop price is reached.
- **Example:** Sell BTC if it drops to $60,000, but only if you can get at least $59,800.
### **6. Trailing Stop Order**
- Adjusts the stop price as the market moves in your favor.
- Locks in profits while allowing room for upside.
### **Which Order Should You Use?**
- **Quick trades?** → Market Order.
- **Precise entry/exit?** → Limit Order.
- **Risk management?** → Stop-Loss & Take-Profit.
