Order Types

Order Types

The various order types are essential tools for every trader. They determine when and at what price your trades will be executed.

Market Order

Immediate execution at the current market price. Used when you want to enter the market quickly. Advantage: Immediate execution. Disadvantage: The actual execution price can deviate from the displayed price through slippage, especially in volatile markets.

Limit Order

Execution only at a specific price or better. You set a price at which you want to buy or sell:

• Buy Limit – Buy order below the current price (you expect the price to fall first and then rise)
• Sell Limit – Sell order above the current price (you expect the price to rise first and then fall)

Stop Order

Activated when a specific price is reached. Then executed as a Market Order:

• Buy Stop – Buy order above the current price (e.g., for breakout strategies)
• Sell Stop – Sell order below the current price (e.g., as a Stop Loss)

Stop-Limit Order

Combination of a Stop and Limit Order. The stop price activates the order, the limit price determines the maximum/minimum execution price. Offers more control, but there is a risk that the order will not be executed.

Trailing Stop

A dynamic Stop Loss that automatically moves with the price in the profitable direction, but not backwards. Ideal for securing profits while the trade continues.

• In a long trade, the Trailing Stop follows the price upward
• In a short trade, it follows the price downward
• Typical trailing distance: 20-50 Pips or based on ATR

OCO Order (One Cancels Other)

Two orders are placed simultaneously. When one is executed, the other is automatically cancelled. Useful for breakout strategies where you don't know which direction the breakout will go.

Practice Tips

• Use Limit Orders for precise entries at support/resistance levels
• Always set a Stop Loss as a Stop Order
• Use Trailing Stops in strong trending markets
• Pay attention to slippage with Market Orders, especially during news events