📌 Types of Orders in trade :
An order is an offer sent using your Exchange or broker’s trading platform to open or close a transaction if the instructions specified by you are satisfied.
Basically, the term “order” refers to how you will enter or exit a trade.
Orders Types:
There are some basic order types that all Exchanges or brokers provide and some others that sound weird.
Orders fall into two buckets:
Market order: an order instantly executed against a price that your Exchange or broker has provided.
Pending order: an order to be executed at a later time at the price you specify.
Limit Order:
A limit order is an order placed to either buy below the market or sell above the market at a certain price.
This is an order to buy or sell once the market reaches the “limit price”.
You place a “Buy Limit” order to buy at or below a specified price.
You place a “Sell Limit” order to sell at a specified price or better.
Once the market reaches the “limit price” the order is triggered and executed at the “limit price” (or better).
It is clear where the order should be filled ,But it does not necessarily mean that it will be filled and it depends on the sufficient volume in the specified price or price range( trigger - order )
Market Order:
A market order is an order to buy or sell at the best available price.
It is not clear where the order will be filled ,It depends on where the price order meets a right volume in apposite order on the other side !
Stop Loss Order:
An order to close out if the market price reaches a specified price, which may represent a loss or profit.
A stop loss order is a type of order linked to a trade for the purpose of preventing additional losses if the price goes against you.
If you are in a long position, it is a sell STOP order.
If you are in a short position, it is a buy STOP order.
REMEMBER THIS TYPE OF ORDER.
A stop loss order remains in effect until the position is liquidated or you cancel the stop loss order.
Trailing Stop:
A stop loss order which is always attached to an open position and which automatically moves once profit becomes equal to or higher than a level you specify.
A trailing stop is a type of stop loss order attached to a trade that moves as the price fluctuates.
Trailing stops helps to lock in profits or limit losses as a trade moves favorably. They also allow traders to place a pre-set order at a specific percentage away from the market price when the market swings.
Limit Orders versus Stop Orders:
New traders often confuse limit orders with stop orders because both specify a price.
Both types of orders allow traders to tell their exchanges or brokers at what price they’re willing to trade in the future.
The difference lies in the purpose of the specified price.
A stop order activates an order when the market price reaches or passes a specified stop price.
One-Cancels-the-Other (OCO):
An OCO order is a combination of two entry and/or stop loss orders.
Two orders are placed above and below the current price. When one of the orders is executed the other order is canceled.
An OCO order allows you to place two orders at the same time. But only one of the two will be executed.
It is usually used when there is uncertainty for next movement of market and the price is between the two key levels of higher resistance and lower support, and you are waiting for the price reaction so on.
for example, you want to buy bitcoin that already trading about $20500 and place a OCO order that if the price reaches the lower support of $20k , you place a buy-limit and your stop-buy limit will be canceled immediately , or otherwise if it crosses the higher resistance of $21k and breaks out it , your stop-buy is active, and your sell-limit order will be canceled at the same time .
vice versa , suppose you have already bought bitcoin at 20k for instance , you place an OCO order, so if it reaches the higher price about 22k as your TP ,you sell it and your cancel stop-limit order will be canceled , or otherwise if it goes down and loses the lower support, your stop-loss will be activated and sell -limit order will be canceled .
other concepts:
Post-Only Orders
Available as an additional option to Limit or Conditional Limit Orders, Post-Only Orders serve to strictly ensure that your Limit Orders will be placed into the order book and therefore pay a lower trading fees then it is ultimately executed. By selecting this option, the system will automatically cancel the limit order, if it detects that it will be executed immediately upon the order placement.
Good till cancelled (GTC): The order will remain valid until it is fully executed or manually cancelled by the trader. GTC is suitable for traders who are willing to wait for all contracts to be completed at a specified price and can flexibly cancel unconcluded contracts at any time.
Fill or Kill (FOK): The order must be immediately executed at the order price or better, otherwise, it will be completely cancelled and partially filled contracts will not be allowed. This execution strategy is more commonly used by scalping traders or day traders looking for short-term market opportunities.
Immediate or Cancel (IOC): The order must be filled immediately at the order limit price or better. If the order cannot be filled immediately, the unfilled contracts will be cancelled. IOC is usually used to avoid large orders being executed at a price that deviates from the ideal price. With this set, the contracts that fail to trade at the specified price will be cancelled.
sources: help.bybit -babypips.com. -academy.binance
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate.
