#OrderTypes101

When entering the trading world, it's essential to understand the types of orders you can use to buy or sell assets. Here’s a quick overview of the most common types of orders:

1. Market Order

Definition: Buy or sell the asset at the current market price.

Usage: When you want to execute the trade immediately.

Disadvantage: The final price may not be what you expect due to market fluctuations.

2. Limit Order

Definition: Specify a certain price to buy or sell the asset.

Usage: When you want a specific price and do not wish to exceed it.

Advantage: Gives you greater control over the price.

Disadvantage: The order may not be executed if the market does not reach the specified price.

3. Stop Order

Definition: The market order becomes active when the price reaches a certain level (stop price).

Usage: To limit losses or to enter the market when a certain price is breached.

Disadvantage: Once activated, it may be executed at an undesirable price if the market is fast-moving.

4. Stop-Loss Order

Definition: A special type of stop order used to reduce losses.

Usage: To protect capital when the market moves against you.

Advantage: Effectively manage risk.