#OrderTypes101

🧾 What Is an Order Type?

An order type tells your exchange or broker how you want to buy or sell an asset (like BTC, QQQ, or AAPL). Each type controls when, how fast, and at what price your trade executes.

💼 Main Order Types (With Examples)

1. Market Order

Executes immediately at the current best price.

✅ Fastest but no price control.

❌ Risk of slippage in volatile or low-liquidity markets.

Example: Buy 1 BTC right now — it executes instantly at the current market price (say, $110,250).

2. Limit Order

Executes only if the market hits your set price (or better).

✅ Price control.

❌ May not fill if the price never reaches your limit.

Example: Place a buy limit order for BTC at $108,000. It only executes if BTC drops to that price.

3. Stop-Loss Order (aka Stop Order)

Triggers a market order once a certain price level is breached.

Common for protecting capital.

✅ Helps prevent large losses.

❌ Might fill at worse prices during high volatility.

Example: You bought BTC at $110K. Set a stop-loss at $105K — if price drops to $105K, it sells at the best available price.

4. Stop-Limit Order

Combines stop + limit.

Once your stop price is reached, it places a limit order (instead of a market order).

✅ More control over execution price.

❌ May not fill if price moves too fast.

Example:

Stop Price: $106,000

Limit Price: $105,800

→ Order is placed at $105,800 only after BTC drops to $106,000.

5. Trailing Stop Order

Dynamically moves your stop based on price movement.

✅ Locks in gains during uptrends.

❌ Still subject to slippage.

Example:

BTC = $110,000,

Trailing stop = 2%

→ If BTC rises to $115,000, your stop adjusts to $112,700. If it drops from there, it sells at market once that level is hit.

📊 Summary Table

Order Type Control Price? Speed Use Case

Market ❌ No ✅ Instant When you need fast entry/exit

Limit ✅ Yes ❌ Waits When you want a specific price

Stop-Loss ❌ No ✅ Fast Auto-sell to reduce losses

Stop-Limit ✅ Yes ❌ Risky Controlled exit under conditions