#Liquidity101 Types of Orders in Trading

When entering the world of trading, it is essential to familiarize yourself with the different types of orders you can use to manage your trades intelligently and effectively.

The first type is the Market Order, which is used to execute the trade immediately at the best available price in the market. This type is fast, but it does not guarantee the price you see at the moment you hit "Buy" or "Sell," especially in volatile markets.

The second type is the Limit Order, which allows you to specify the price at which you want to buy or sell. The order is only executed if the price reaches the limit you set, giving you better control, but it may never be executed if the market does not reach that price.

As for the Stop Order, it is used to minimize losses or protect profits. This order is activated when the price reaches a certain level, then it turns into a market order.

Understanding these types and using them correctly helps you reduce risks and enhance your trading strategy.