#OrderTypes101 Order Types 101 – Basic Order Types in the Market

📌 1. Market Order

What it is: Immediate buying or selling at the best available price.

When to use: When you want to enter or exit a position quickly, without caring about small price variations.

Pros: Fast execution.

Cons: There may be slippage (difference between the expected price and the executed price), especially in volatile markets.

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📌 2. Limit Order

What it is: You set the maximum price (buy) or minimum price (sell) you accept. The order is only executed if the market reaches that price.

When to use: When you want total control over the price, even if it takes longer to execute.

Pros: Prevents paying more or selling for less than desired.

Cons: The order may not be executed if the target price is not reached.

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📌 3. Stop Order (Stop Order or Stop-Loss)

What it is: An order that becomes a market order when the price reaches a certain level ("trigger price").

Example: Buy when the price rises above R$ 50 (buy stop) or sell when it falls below R$ 45 (sell stop).

Used for: Protecting profits or limiting losses.

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📌 4. Stop-Limit Order

What it is: Combines a stop order with a limit order.

When the price reaches the trigger price, the order becomes a limit order instead of a market order.

Risk: If the price drops very quickly, the order may not be executed, unlike the stop market.

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📌 5. Trailing Stop Order

What it is: A trailing stop. The stop order adjusts automatically as the price moves in your favor.

Example: You set a trailing stop of 5%. If the price rises, the stop rises along. If it falls 5% from the peak, the order is triggered.

Great for: Automatically protecting gains.

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📌 6. OCO (One Cancels the Other)

What it is: A type of dual order where, when one is executed, the other is automatically canceled.

Useful for: Setting a profit target and a stop-loss at the same time.

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📌 7. Fill or Kill (FOK) / Immediate or Cancel (IOC)

FOK: The order must be executed fully and immediately, otherwise it is canceled.

IOC: Tries to execute as much as possible immediately, and what is not executed is canceled.