📊 #OrderTypes101 — The Basics You Should Know

When you trade stocks, crypto, forex, or other assets, you place orders to buy or sell. But did you know there are different order types designed to give you control over how and when your trade happens? Let’s break down the essentials:

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📌 Market Order

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

Best for: Quick entries/exits when price precision isn’t critical.

Risk: You might get a different price than expected in fast-moving markets.

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📌 Limit Order

What it does: Buys or sells at a specific price or better.

Best for: When you have a target price in mind.

Risk: Your order might not fill if the market doesn’t reach your limit price.

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📌 Stop Order (Stop-Loss)

What it does: Becomes a market order once a certain price (the stop price) is hit.

Best for: Protecting profits or limiting losses.

Risk: In volatile markets, you might get a worse price than your stop.

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📌 Stop-Limit Order

What it does: Combines a stop order and a limit order. When the stop price is hit, it places a limit order instead of a market order.

Best for: Adding protection against price slippage after your stop is triggered.

Risk: It may not fill if the price moves past your limit too quickly.

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📌 Trailing Stop

What it does: Moves with the market price by a fixed amount or percentage. Locks in profits while limiting downside.

Best for: Riding trends while protecting gains.

Risk: In choppy markets, it can get triggered by random price swings.

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📌 Fill or Kill (FOK)

What it does: Executes the entire order immediately at your price or cancels it.

Best for: When partial fills are unacceptable.

Risk: It might cancel if there’s not enough liquidity.

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📌 Good ‘Til Canceled (GTC)

What it does: Stays active until you cancel it or it’s executed.

Best for: Setting long-term orders without constantly re-entering them.

Risk: Market conditions might change while the order waits.