Order Types That Matter

An order is simply an instruction to your broker. You'll meet a dozen exotic order types over your career, but three of them do the vast majority of the work, and understanding exactly what each one guarantees — and what it doesn't — will save you real money.

The three you must know

1. 01Market order — 'fill me now at the best available price.' It guarantees you get in, but not the exact price. In fast markets you can be filled worse than you expected. This is called slippage.
2. 02Limit order — 'fill me only at this price or better.' It guarantees your price, but not that you get filled at all. If the market never reaches your level, nothing happens.
3. 03Stop order — 'once price reaches this level, turn my order into a market order.' Used to enter on a breakout, or — more importantly — to exit a losing trade automatically.

Market vs limit: the trade-off

Every entry is a choice between certainty of fill (market order) and certainty of price (limit order). If getting into the move matters more than a fraction of a pip, use a market order. If you'd rather miss the trade than chase it, use a limit. There is no universally correct answer — only the right one for that specific setup.