Order Types Explained
Order Types Explained
Understanding order types helps you trade with precision and manage risk.
Market Order
Executes immediately at the best available price. Best for: quick entry/exit.
Example
Apple at $185.50 → market buy fills at ~$185.50
Limit Order
Sets max buy price or min sell price. Only fills when your price is reached. Best for: better entry price.
Example
Apple at $185.50. Limit buy at $180 → fills only if price drops to $180.
Stop-Loss Order
Auto-closes position at a specified loss level. Best for: protecting capital.
Example
Buy at $185, stop-loss at $175. Max loss: ~5.4%.
Take-Profit Order
Auto-closes at your profit target. Best for: locking in gains.
Example
Buy at $185, take-profit at $200. Gain: ~8.1%.
Trailing Stop-Loss
Moves with price in your favour, closes if price reverses by set distance. Best for: riding trends safely.
Example
Buy at $185, trail $5. Price hits $200 → stop at $195. Reverses → close at $195. Profit: $10.
Comparison
| Type | Execution | Price Control | Use Case |
|---|---|---|---|
| Market | Immediate | None | Quick entry/exit |
| Limit | At target price | Full | Better price |
| Stop-Loss | At trigger | Partial | Limit losses |
| Take-Profit | At trigger | Partial | Lock gains |
| Trailing Stop | Dynamic | Partial | Ride trends |
Pro Tip: Always use stop-loss on CFDs. Target 1:2 risk-reward ratio.