Orders are the instructions you give the market. Knowing which order type to use — and when — is the difference between precise execution and costly surprises.
Market vs pending orders
A market order executes immediately at the best available price. Pending orders wait for a condition: a limit order buys below / sells above the current price (better price), while a stop order buys above / sells below (used for breakouts or stops).
Stop-loss and take-profit
A stop-loss automatically closes a losing trade at a set level — non-negotiable for survival. A take-profit closes a winner at your target. Setting both at entry removes emotion from the exit.
Slippage and gaps
In fast markets, market and stop orders can fill at a worse price than expected (slippage), and prices can gap over your stop on weekend opens or major news. No order type fully removes this — position sizing is your real protection.
Key takeaways
- Market orders fill now; limit/stop orders wait for a price condition.
- Always set a stop-loss at entry; add a take-profit for a planned exit.
- Slippage and gaps are real — size positions so a bad fill can't ruin you.