#OrderTypes101 Order Types 101 refers to the basic concepts of the different types of orders you can use when trading, whether in cryptocurrencies, stocks, or other assets. Understanding them is key to executing trades more effectively and managing risks. Here I explain the main types:
---
1. Market Order
Buy or sell an asset immediately at the best available price.
Advantage: quick execution.
Disadvantage: you do not control the exact price; there may be slippage.
---
2. Limit Order
You set the exact price at which you want to buy or sell.
Example: "I want to buy Bitcoin at $65,000."
Advantage: you control the price.
Disadvantage: it does not execute if the market does not reach that price.
---
3. Stop Order
A market order is triggered when a specific price is reached.
Example: "Sell if the price drops to $60,000."
Typical use: limit losses (stop-loss) or secure profits (take-profit).
Disadvantage: as it becomes a market order, there may be slippage.
---
4. Stop-Limit Order
Combines a stop order with a limit order.
Example: "If BTC drops to $60,000, sell, but only if you can do it at $59,900 or more."
Advantage: more control over the price.
Disadvantage: it may not execute if the market moves too quickly.
---
5. Trailing Stop Order
The activation price automatically adjusts according to market movement.
Example: "Sell if the price drops 5% from the highest peak."
Ideal for following trends and securing profits while the price rises.
---
6. OCO (One Cancels the Other)
Combines two orders: if one executes, the other automatically cancels.
Very useful for setting a take profit and a stop-loss at the same time.
