#OrderTypes101
📘 Order Types 101 in Crypto Trading
1. Market Order
What it is: Buys or sells immediately at the best available price.
Use when: You want to enter or exit a trade quickly.
✅ Pros: Fast execution
❌ Cons: You may get a worse price if the market is volatile.
Example:
BTC is trading at $60,000. A market buy order will fill instantly around that price—even if it's slightly higher or lower.
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2. Limit Order
What it is: You set the exact price at which you want to buy or sell.
Use when: You want better control over your entry/exit price.
✅ Pros: You control the price
❌ Cons: May not get filled if the price doesn’t reach your limit.
Example:
BTC is at $60,000. You place a buy limit order at $58,000. It will only execute if the price drops to $58K.
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3. Stop-Loss Order
What it is: Automatically sells (or buys) when the price hits a certain level to limit your loss.
Use when: You want to protect yourself from big losses.
✅ Pros: Helps manage risk
❌ Cons: In very fast markets, it might execute at a worse price.
Example:
You bought ETH at $3,000. You place a stop-loss at $2,800. If the price drops, it will sell automatically to prevent further loss.
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4. Take-Profit Order (TP)
What it is: Automatically closes a position when a certain profit level is reached.
Use when: You want to lock in profits without monitoring the market all day.
✅ Pros: Automates profit-taking
❌ Cons: You may miss more gains if the market keeps rising
Example:
You bought BNB at $300. You place a take-profit order at $350. Once the price hits $350, it sells to secure the gain.
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5. Stop-Limit Order
What it is: A combination of stop-loss and limit order.
Use when: You want to sell/buy only at a specific price after a stop level is triggered.
✅ Pros: More price control than a stop-loss
❌ Cons: Might not get filled in volatile conditions
Example:
You set a stop price at $2,900 and a limit at $2,850. When the price hits $2,900, your order activates but only sells if the price is at or above $2,850.
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