Types of Orders you'll come across on different trading platforms📉📈

Hey bees, how are we doing tonight, well, I'm alright and I'm here once again to write out my mind,well I'll be teaching a few people actually, although i can still learn from those who might want to educate me more on the subject.

Today, I would like to explain to you the different types of orders you'll definitely come across once you start trading, be it forex, cryptos, stocks or what have you. On most trading platforms, you'll see different types of orders when you want to buy or sell an asset, these orders can be the defining factor of your trade.

Basically, We have the following types of orders:

  • Market order
  • Limit order
  • Buy Stop/sell stop order
  • Take profit/stop loss order
    Alright, lets jump in, shall we?

Market order

As a novice, this is the order you'll probably be most familiar with. It's quite self-explanatory, you buy or sell the asset at the current market price, although anybody can use this type of order, expert or novice. Mostly, I use this order when i want to get in a trade immediately so i just buy or sell at the best available price. This saves me the time of having to wait on the que to have my order filled. Long term investors also use this kind of trade a lot. Mind you this type of orders usually comes with a little fee, cos you're a market taker. For instance, asset, ABC is trading at $20, and you just want to buy cos you think it's a good bargain, so you go ahead and buy right away.

Limit Orders
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In in this type of order, you buy have control over the price at which you are willing to pay. It basically saying you wish to sell or buy a particular asset at your own suitable price unlike market orders where you have no real say on the price you wish to buy at. For instance, asset ABC is trading at $20 and wish to buy lower maybe because you must have predicted a downfall of the price, you simply place a buy limit order at a lower price say $15 or when you have asset ABC which was trading at $20 but you wish to sell at $25, you simply place a sell limit order. This saves you time and the stress of having to watch the market all day long. There's a catch though, your order won't be filled immediately unless the actual price of the said asset reaches your set price, that is to say, you won't be able to buy asset ABC until to price gets to $15, and this may take some time, in some cases, it never reaches your set price, so your order is at risk of not getting filled at all. But hey, look on the bright side, once your order gets filled, you get to buy low and maybe sell high, that's the joy of it right? Plus this type of order usually comes with no fee as you're a market maker.

Stop Orders

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Here, we have two subtypes, the Buy stop order and Sell stop Order. It's the basic buying and selling but comes with an added feature. Remember the limit order where you tend to predict the downturn of an asset and then aim to buy low? Well this is just the opposite, in a way though. When we talk of Buy stops, we are simply aiming to catch a moving trend 📈, bullish in this case, it's just like awaiting the confirmation of a trend when it hits your set price. Imagine a trader, having done his or her analysis or listened to the news, and is of the believe that asset ABC will be on the rise,say from $20 to about $40, but is not so sure and doesn't want to jump in a trade and at the same time, doesn't have the luxury of time to sit watch the asset's movement, so he'll simply place a buy stop order at about $25 dollars and move on to do something else. Now once this price hits the set mark price, the trader can now be sure that the asset is bullish and will most like to continue in that motion. The same goes for Sell stop Orders, but in the opposite direction this time around.

Take Profit/Stop loss Orders

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Ahhh, who doesn't like to secure his profits, or cut his losses, as a wise trader you should consider these words, really. These orders also saves you the stress of having to manually enter and exit a trade. Take profit as the name implies, simply means to take you profit and stop loss simply means to stop your losses in events where the trade doesn't go according to plan. These orders are entered automatically by the system which you must have set, you do not want a situation where you keep losing till you're rekt or you give back the profit you've made. For instance, you enter the trade of asset ABC at $20 and you're aiming to get a profit of $10 and you're only will to risk $3 on this trade, so you'll simply place your take profit order at $30 and your stop loss order at $17, the system takes note of these commands and execute them in due time. Mind you, when placing a stop loss order for a buy command, you stop loss should be lower than the current price and your stop loss should be higher than the current price when setting a sell command.

Well, it's a wrap here, we'll have to continue some other time. Thanks for stopping by and reading through, you can ask questions or drop reviews in the comments section. Gracias 🙏

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