# Order Types

## Basic Order Types

### Market Order

**Executes immediately at best available price.**

**How it works:** Submit order → Matches instantly → Fills at current price

**Example:**

```
BTC showing: $50,000
Market buy 0.1 BTC
Fills at: $50,015 (slippage)
Cost: $5,001.50
```

| Pros                 | Cons                     |
| -------------------- | ------------------------ |
| Guaranteed execution | No price control         |
| Immediate entry/exit | Slippage in fast markets |
| Simple               | Costs bid-ask spread     |

**Use when:** Need immediate execution, high liquidity, urgent trade **Avoid when:** Want specific price, low liquidity, large position

### Limit Order

**Executes only at your specified price or better.**

**How it works:** Set price → Waits on order book → Fills when price reached (or never)

**Example:**

```
BTC at: $50,000
Limit buy at: $49,500
Waits...
If price drops to $49,500 → Fills
If price rises → Never fills
```

| Pros                     | Cons                |
| ------------------------ | ------------------- |
| Price control            | May never fill      |
| No slippage beyond limit | Might miss move     |
| Better fills possible    | Requires monitoring |

**Use when:** Want specific price, not urgent, buying dips/selling rallies **Avoid when:** Need guaranteed execution, fast-moving market

## Advanced Order Types

### Stop Loss Order

**Automatically closes position when price moves against you.**

**How it works:** Set trigger price → Price hits trigger → Converts to market order → Closes position

**Example:**

```
Buy BTC at: $50,000
Stop loss at: $49,000 (2% loss)
Price falls to $49,000
Stop triggers → Closes ~$48,950-$49,000
Loss limited to ~2%
```

**Stop loss types:**

| Type          | Description           | Example                         |
| ------------- | --------------------- | ------------------------------- |
| **Fixed %**   | Set % below entry     | Always 2% below entry           |
| **Technical** | Below support/pattern | Below recent swing low          |
| **Trailing**  | Moves up with price   | Always 3% below highest reached |

**When to use:** Every trade (always), volatile markets, can't monitor **Best practices:** Place below support, account for volatility, never remove hoping for recovery

### Take Profit Order

**Automatically closes position when profit target reached.**

**How it works:** Set target → Price reaches target → Converts to market → Locks profit

**Example:**

```
Buy BTC at: $50,000
Take profit at: $52,000 (4% gain)
Price rises to $52,000
Closes ~$51,950-$52,000
Profit locked at ~4%
```

**Strategies:**

* Use with stop loss for complete automation
* Scale out (multiple targets at different levels)
* Based on support/resistance
* Risk-reward ratios (2:1, 3:1)

### Stop Limit Order

**Combination of stop and limit orders.**

**How it works:** Stop price triggers → Converts to limit order (not market) → Fills only at limit or better

**Example:**

```
BTC at: $50,000
Stop: $49,000
Limit: $48,800
Price falls to $49,000 → Triggers
Becomes limit sell at $48,800
Only executes if can get $48,800+
```

| Pros                       | Cons                          |
| -------------------------- | ----------------------------- |
| Price protection on stops  | Might not fill in fast market |
| No terrible slippage fills | Could lose more if gaps       |

**Use when:** Want price protection, liquid markets, experienced **Avoid when:** Need guaranteed stop, volatile markets, beginners

## Order Duration

| Type                          | Description                  | Use For                                     |
| ----------------------------- | ---------------------------- | ------------------------------------------- |
| **GTC** (Good-Til-Canceled)   | Stays until filled/canceled  | Limit orders, long-term targets, no urgency |
| **IOC** (Immediate-or-Cancel) | Fills immediately or cancels | Avoid partial fills                         |
| **FOK** (Fill-or-Kill)        | All or nothing, instant      | Large orders, no partials                   |
| **Day Order**                 | Cancels end of trading day   | Short-term trades                           |

## Order Strategy by Scenario

### Entering Position

| Scenario                 | Order Type             | Why                     |
| ------------------------ | ---------------------- | ----------------------- |
| **Need immediate entry** | Market                 | Guaranteed execution    |
| **Want specific price**  | Limit                  | Price control           |
| **Volatile market**      | Limit with wider range | Balance speed + control |

### Protecting Position

| Scenario            | Order Type    | Why                              |
| ------------------- | ------------- | -------------------------------- |
| **Always**          | Stop Loss     | Limit downside                   |
| **Clear target**    | Take Profit   | Lock gains                       |
| **Let winners run** | Trailing Stop | Capture upside, protect downside |

### Exiting Position

| Scenario            | Order Type    | Why               |
| ------------------- | ------------- | ----------------- |
| **Emergency exit**  | Market        | Immediate out     |
| **Profit target**   | Limit         | Better fill price |
| **Trailing profit** | Trailing stop | Maximize gains    |

## Common Combinations

**Standard setup (most trades):**

* Entry: Limit order at key level
* Stop: Stop loss below support
* Target: Take profit at resistance

**Breakout setup:**

* Entry: Market or limit above breakout
* Stop: Inside consolidation range
* Target: Measured move or trailing

**Swing trade setup:**

* Entry: Limit at support
* Stop: Below swing low
* Target: Multiple take profits (scale out)

## Order Type Mistakes

**Using market orders for everything:**

* **Problem:** Excessive slippage
* **Fix:** Use limits when not urgent

**No stop losses:**

* **Problem:** Catastrophic losses
* **Fix:** Always set stops before entry

**Setting and forgetting:**

* **Problem:** Market changes, orders outdated
* **Fix:** Review and adjust daily

**Chasing with market orders:**

* **Problem:** Bad fills on extended moves
* **Fix:** Wait for pullback, use limit

***

**Master order types for better execution.** Use the right tool for each scenario to maximize profits and minimize slippage.

**Related:** [Risk Management](/quantsedge-docs/trading-fundamentals/risk-management.md) | [Trading Limits](https://github.com/quantsedgeai/app/blob/wonk/docs/guides/trading-limits.md) | [Fee Structure](/quantsedge-docs/reference/fee-structure.md)


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