Hello Hive friends
I hope you all are doing great! As you know, we recently started our Spot Trading Course, and step by step we are covering the most important topics that every beginner must understand.
Today, let’s talk about something very practical and super important in trading: Order Types.
1. Market Order
This is the simplest type of order.
When you place a Market Order, you are saying: “I want to buy or sell this coin instantly at the best available price in the market.
Advantage: It’s fast and guaranteed to execute. Disadvantage: You might not always get the exact price you wanted, especially in a highly volatile market.
Example: If Bitcoin is trading at $100,000, a market buy order will purchase it right away at the nearest available price.
Limit Order
A Limit Order allows you to set the price at which you want to buy or sell.
Your order will only execute when the market reaches that price.
Advantage: More control over the price. Disadvantage: Sometimes your order may not get filled if the market never reaches your price.
Example: If Bitcoin is $100,000, you can place a buy limit order at $99,000. It will only execute when the price drops to $99,000.
3. Stop-Loss Order
This is a risk management tool. A Stop-Loss Order helps you limit your losses when the market moves against you.
Advantage: Protects your capital.
Disadvantage: In fast-moving markets, sometimes the execution can slip.
Example: If you bought Bitcoin at $100,000, you can set a stop-loss at $98,000. If the price falls to $98,000, your position will automatically sell, preventing further losses.
Understanding Market, Limit, and Stop-Loss Orders is a must for every trader.
Market orders = Speed
Limit orders = Control
Stop-loss orders = Protection
If you learn how to use these three wisely, you’ll already be ahead of many beginners in the market.