#OrderTypes101 common phrase used in trading education to introduce beginners to the basic types of orders used in trading financial instruments like stocks, forex, and crypto.
Here's a quick breakdown of the most common order types:
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🟢 1. Market Order
Definition: Buys or sells immediately at the current market price.
Use Case: When you want to enter or exit a trade quickly.
Pros: Fast execution.
Cons: Price may change before the order is filled (slippage).
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🟡 2. Limit Order
Definition: Buys or sells at a specified price or better.
Use Case: When you want a specific price and can wait.
Pros: No slippage; better control.
Cons: May not get filled if the market never hits your price.
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🔴 3. Stop Order (Stop-Loss Order)
Definition: Becomes a market order once a specific price is reached.
Use Case: To limit losses or protect profits.
Example: Sell BTC if it drops below $60,000.
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🟣 4. Stop-Limit Order
Definition: A hybrid of stop and limit orders. Once the stop price is hit, a limit order is placed.
Use Case: More control than a simple stop-loss, but may not fill.
Example: Stop at $60,000, limit at $59,800.
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🔵 5. Take-Profit Order
Definition: Automatically sells at a predefined profit level.
Use Case: Lock in profits without manual monitoring.
Often used with: Stop-loss orders for risk management.
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⚪ 6. Trailing Stop Order
Definition: A stop order that moves with the market price.
