Types of Orders in Trading 101

A Comprehensive Guide to Order Types in Financial Markets

## 1. **Market Orders**

- **Description**: Immediate execution at the best available price.

- **Advantages**:

- Fast execution (priority in the queue).

- Ideal for highly liquid assets.

- **Disadvantages**:

- Does not guarantee a specific price (especially in less liquid assets).

## 2. **Limit Orders**

- **Description**: Buy/Sell at a specified price or better.

- **Advantages**:

- Precise control over the price.

- Suitable for technical analysis (entering at support/resistance levels).

- **Disadvantages**:

- May not be executed if the price does not reach the specified level.

## 3. **Stop Orders**

- **Description**: Converts to a market order when a specified price is reached (stop loss or trailing profit).

- **Example**:

- **Stop-Loss**: Automatically closing the trade when the price drops by a certain percentage.

- **Trailing Stop**: Adjusts as the price moves in your favor (protects your gains).