#OrderTypes101

💼 Basic Order Types

1. Market Order

Definition: Buy or sell immediately at the best available price.

Pros: Instant execution.

Cons: You may get a worse price in fast-moving or low-liquidity markets.

Use Case: When speed is more important than price (e.g., exiting a trade quickly).

2. Limit Order

Definition: Buy or sell at a specific price or better.

Buy Limit: Set below current market price.

Sell Limit: Set above current market price.

Pros: Controls the price you pay or receive.

Cons: May not be filled if the market doesn’t reach your price.

Use Case: When price matters more than speed.

3. Stop Order (Stop-Loss Order)

Definition: Triggers a market order once a specific price (the stop price) is hit.

Pros: Helps limit losses or lock in profits.

Cons: May get filled at a worse price in volatile markets.

Use Case: Risk management — exit if a trade moves against you.

4. Stop-Limit Order

Definition: Triggers a limit order once a stop price is hit.

Pros: Combines stop-loss with price control.

Cons: May not execute if the limit price is not met.

Use Case: More precise exit strategy with risk control.