Market, limit, stop and stop-loss orders each do one job. What each one does, when it fills, and what getting in costs you.<\/p>\n
An order is an instruction to the platform: what to trade, how much, and on what condition. There are three groups.<\/p>\n
Your choice decides two things: whether you get in at all, and at what price. No order type gives you both.<\/p>\n
A market order fills at the best price available the moment it reaches the server. You choose the size and the direction, not the price.<\/p>\n
Every instrument carries two prices. The bid<\/strong> is where you sell, the ask<\/strong> is where you buy, and the gap is the spread<\/strong>. A market buy fills at the ask and is valued at the bid, so the position opens showing a small loss equal to the spread. That is a cost, not an error.<\/p>\n In fast markets and thin hours, price can move between your click and the server. The order still fills, at the next available price. This is slippage<\/strong>: a market order puts being filled ahead of the fill price.<\/p>\n A limit order<\/strong> sits at a better price than the market and fills at your price or better. A buy limit sits below the current price: buy, but only if it gets cheaper. You control the price, but price may never reach it.<\/p>\n A stop order<\/strong> sits at a worse price than the market, and traders use one to enter only after price moves their way, as confirmation. When price touches it, a stop order becomes a market order: your level is a trigger, not a fill price, and in a fast market you can be filled well beyond it.<\/p>\n A stop-loss<\/strong> closes an open position once price reaches a level you set. On a long it sits below your entry; on a short, above, following the direction you took in going long vs going short<\/a>. A take-profit<\/strong> does the same on the other side.<\/p>\n What a stop-loss does not do is fix your exit price. It is a stop order, so it becomes a market order when triggered. If price gaps past your level over a weekend or on a data release, the position closes at the first price available. Sizing so that this stays survivable is the subject of position sizing and the 1% rule<\/a>.<\/p>\nLimit and stop orders: waiting for a price<\/h2>\n
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\n \nOrder<\/th>\n Sits where<\/th>\n Price you get<\/th>\n<\/tr>\n<\/thead>\n \n Buy limit<\/td>\n Below current price<\/td>\n Your price or better<\/td>\n<\/tr>\n \n Sell limit<\/td>\n Above current price<\/td>\n Your price or better<\/td>\n<\/tr>\n \n Buy stop<\/td>\n Above current price<\/td>\n Next available price after the trigger<\/td>\n<\/tr>\n \n Sell stop<\/td>\n Below current price<\/td>\n Next available price after the trigger<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Stop-loss, take-profit and how long an order stays live<\/h2>\n