Before you place a single trade, you need to know your order types. Picking the wrong one can mean a worse price, a missed entry, or no protection when you needed it.
The three you must know
- Market order — buy or sell right now at the best available price. Fast and certain to fill, but in fast or thin markets you may get a worse price than you saw (slippage).
- Limit order — buy or sell only at a specified price or better. You control the price but the fill isn't guaranteed — price may never reach your level.
- Stop order — an order that activates once price hits a trigger. Used to enter on a breakout, or — crucially — as a stop-loss to exit a losing trade.
Stop-loss and take-profit
These are the orders that manage risk automatically:
- Stop-loss — closes the trade if price moves against you to a set level. Non-negotiable on every position. More in stop-loss orders.
- Take-profit — a limit order that closes the trade at your target.
Setting both when you enter means the trade is managed even while you're away.
Market vs limit: which to use
- Use limit orders to enter patiently at a planned level — you avoid chasing.
- Use market orders when getting in (or out) now matters more than a fraction of a pip.
The order type is how your plan reaches the market. Decide entry, stop and target before you click — not after.
Education only — not financial advice.