#TradingTypes101 Crypto Orders - Market Orders, Stop Limit Orders, Limit Orders

A trade order refers to an agreement to sell or purchase a particular crypto asset at a certain price range or price. Crypto investors can sell or buy several cryptos via three basic trading orders — limit, market, and stop-limit orders. Thus every crypto enthusiast needs to understand these basic trading order types.

Market Orders

Market orders are the simplest type of trade orders. Usually, traders place these if they are willing to ensure that a trade is executed. It simply refers to an order a trader places to sell or purchase any asset such as Bitcoin immediately at its current price.

An example of market order: Mr X is looking forward to selling 0.75 Bitcoin (BTC) at this moment or as soon as possible.

A market order is supposed to be executed instantly or, at least, as close to instant execution as possible. When a particular market transaction has occurred and the order is completed, traders refer to it as “the order has been filled”. It’s worth noting that a market order will be instantly filled always, or it will not be executed.

Advantages of a market order

Some major advantages of market orders are their efficiency, immediacy, simplicity, and ability to fill (in most cases).

Disadvantages of a market order

Placing a market order on an exchange comes with the disadvantage that the concerned individual agrees that the exchange fills the order at the best possible price for that timeframe. This again gives rise to another limitation: the more price-sensitive traders lose out, and those agreeing to increased prices get their market orders filled first.

Limit Order

A limit order is an order to sell or purchase an asset at a particular price. The purpose placing these orders is to limit price risks.

An example of a limit order: Suppose the price for BTC/EUR is currently EUR 9000 and Mr X places a limit buy order for a limit price of EUR 8500. In this case, the order is supposed to execute at EUR 8500 when there comes a matching sell order at this price.