#OrderTypes101
1. Market Order
Definition: Buy or sell immediately at the current market price.
Use Case: Fast execution.
Risk: You may not get the best price during high volatility.
Example:
You place a market order to buy Bitcoin → You get the best available price right now.
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🔹 2. Limit Order
Definition: Buy or sell only at a specific price (or better).
Use Case: More control over the price.
Risk: May not get filled if the market doesn’t reach your price.
Example:
You set a limit buy order at $60,000 for BTC → It only executes if BTC drops to that price.
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🔹 3. Stop-Loss Order (Stop Market)
Definition: A market order triggered when the price hits your stop level.
Use Case: To limit losses or protect profits.
Risk: Price could gap past your stop.
Example:
You own ETH and set a stop-loss at $3,000 → If ETH drops to that, it auto-sells at the best available price.
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🔹 4. Stop-Limit Order
Definition: Like a stop-loss, but becomes a limit order instead of a market order when triggered.
Use Case: More control during a stop-trigger.
Risk: May not execute if the market skips your limit price.
Example:
Stop at $3,000, limit at $2,950 → If price hits $3,000, it places a limit sell at $2,950.
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🔹 5. Trailing Stop Order
Definition: A stop order that follows the price by a fixed amount.
Use Case: Lock in profits while letting a trade run.
Risk: Can trigger in volatile conditions.
Example:
You buy BTC at $50,000, set a trailing stop $1,000 below. If BTC goes to $55,000, stop moves to $54,000.
