#OrderTypes101
📘 Order Types (Types of Orders in Trading)
1. 🟢 Market Order
Definition: An order to buy or sell immediately at the current market price.
When to use: If you want to enter/exit the market quickly.
Advantages: Immediate execution.
Disadvantages: Can experience slippage (price slightly different from what is seen).
> Example: "Buy 1 BTC now at whatever the market price is."
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2. 🟡 Limit Order
Definition: An order to buy/sell at a specific price or better.
When to use: When you want a specific price, not just to buy/sell immediately.
Advantages: Full control over the price.
Disadvantages: Not always executed immediately, may remain unfilled.
> Example: "Buy 1 BTC only if the price drops to $60,000."
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3. 🔴 Stop Order (Stop-Loss / Stop-Buy)
Definition: An order that becomes active only after a certain price is reached.
Consists of:
Stop-Loss: Automatically sell if the price drops to a certain limit → to limit losses.
Stop-Buy: Automatically buy if the price rises to a certain level → usually for breakout strategy.
> Example: "Sell BTC if it drops to $58,000 to avoid further losses."
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4. 🟠 Stop-Limit Order
Definition: A combination of a stop order and a limit order. A new order enters the order book as a limit order after a certain price (trigger) is reached.
Safer, but there is a risk of not being executed if the price continues to move past its limit.
