Order Types & Execution
Knowing what to trade is only half the job — you also need to know how to place the trade. The order type you choose affects your fill price, your risk, and whether you pay the spread. This lesson covers the core order types and the execution concepts every trader should understand.
The Core Order Types
- Market order — executes immediately at the best available price. Fast, but you pay the spread and may suffer slippage on thin books.
- Limit order — executes only at your price or better. You control price, but the order may never fill.
- Stop-market order — becomes a market order once a trigger price is hit. Common for stop losses; guarantees exit, not price.
- Stop-limit order — becomes a limit order at the trigger. Controls price but can fail to fill in a fast move — dangerous for stops.
- OCO (one-cancels-the-other) — pairs a take-profit and a stop loss; filling one cancels the other.
Maker vs Taker
- A maker adds liquidity (a resting limit order) and usually pays lower fees.
- A taker removes liquidity (a market order) and usually pays higher fees.
Over many trades, fees matter. Using limit orders where possible can meaningfully improve results.
Slippage, Spread and Liquidity
- Spread is the gap between the best bid and best ask.
- Slippage is the difference between expected and actual fill price.
- Liquidity determines how large an order you can fill without moving the price.
Low-liquidity altcoins can slip badly on market orders. In volatile conditions, spreads widen and slippage grows — plan entries accordingly.
Practical Guidance
- Use limit orders for entries when you're not chasing a breakout.
- Use a stop-market (not stop-limit) for protective stops so you always exit.
- Attach an OCO so your risk and reward are defined the moment you enter.
- Check the order book depth before sizing up on illiquid pairs.
Next Steps
- Apply this when reading a signal.
- Combine with Risk Management to size correctly.
- Revisit Leverage & Margin for liquidation-aware execution.
Educational content only — nothing here is financial advice.