#OrderTypes101

How Do Market, Limit, Stop-Loss, and Take-Profit Orders Work?

Understanding order types is key to better trading. Here’s a quick breakdown of the 4 most common ones, how to use them, and a real example from my own trading experience.

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✅ 1. Market Order

What it does: Buys or sells immediately at the best available price.

When to use:

✔️ Fast entry/exit during high volatility

❗ Watch out for slippage on low-liquidity tokens

I use this: When I need to enter or exit quickly

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✅ 2. Limit Order

What it does: Buys/sells at your chosen price (or better).

When to use:

✔️ When you’re not in a rush and want a better price

❗ It might not fill if price doesn’t reach your limit

I use this: To enter trades at support/resistance zones

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✅ 3. Stop-Loss Order

What it does: Automatically sells your position if the price drops to a certain level.

When to use:

✔️ To limit losses and protect capital

❗ Price may hit your stop before bouncing back

I use this: On every trade to manage risk

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✅ 4. Take-Profit Order

What it does: Automatically sells when the price reaches your target

When to use:

✔️ To lock in profits without watching the chart all day

❗ Sometimes the price almost hits it but reverses

I use this: With my stop-loss to set clear exit levels

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⭐ My Go-To: Limit + Stop-Loss

I prefer setting limit entries with stop-losses. It gives me better entries and controlled risk.

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📉 Real Trade Example

I once bought a coin during a breakout using a market order. The price spiked, but due to slippage, I entered much higher than expected — and the coin retraced quickly. I didn’t set a stop-loss, and the loss was painful. Lesson learned: Always combine order types with risk management!

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Which order type do YOU use the most? Let’s share and learn from each other 👇

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