In short
- A market order fills immediately at the best available price; you control speed, not price.
- A limit order fills only at your price or better; you control price, not whether it fills.
- Stop orders sit dormant until a trigger price, then become market (or limit) orders.
- In fast or thin markets, market and stop orders can fill well away from the price you saw.
How an order book works
Every exchange keeps an order book: a list of buy orders (bids) and sell orders (asks) waiting at different prices. The highest bid and the lowest ask form the current quote, and the gap between them is the spread. When a new order arrives that can be matched against a waiting order, the exchange's matching engine executes the trade.
Orders that wait in the book add liquidity and are called maker orders. Orders that execute immediately against the book remove liquidity and are called taker orders. Many crypto exchanges charge makers a lower fee than takers for this reason.
Market orders
A market order says "buy (or sell) now, at whatever the best available price is". It almost always fills, but you do not control the price. If the order is larger than the quantity available at the best price, it keeps filling at the next levels, a process called walking the book.
The difference between the price you expected and the price you got is slippage. It is usually tiny on major forex pairs and large coins during busy hours, and can be significant in quiet markets, small coins or around major news.
Limit orders
A limit order sets the worst price you will accept: a buy limit at or below your price, a sell limit at or above it. If the market never reaches your price, the order never fills. If it only partly reaches it, you may get a partial fill.
Limit orders protect you from slippage and are the usual choice for entering positions when you are not in a hurry. They are also how you place a take-profit.
Stop orders
A stop order waits until the market trades at a trigger price, then becomes a market order. Its most common use is the stop-loss: an instruction to close a position if the price moves against you by a set amount.
Because a triggered stop becomes a market order, it can fill beyond the trigger in a fast move or after a gap, for example over a weekend. Some providers offer guaranteed stops for an extra fee; check the terms. The position size calculator helps you size a trade around a stop distance.
Stop-limit orders
A stop-limit order becomes a limit order, not a market order, once triggered. That caps the price you will accept but means the order may not fill at all if the price moves quickly through your limit, leaving you in a losing position. It trades certainty of exit for control of price.
Trailing stops and OCO orders
- Trailing stop: a stop that follows the price at a set distance as it moves in your favour, and stays put when it moves against you.
- One-cancels-the-other (OCO): a pair of orders, typically a take-profit and a stop-loss, where filling one cancels the other.
Order types compared
| Order | Controls | Main risk | Typical use |
|---|---|---|---|
| Market | Speed | Slippage | Getting in or out immediately |
| Limit | Price | Not filled | Entries and take-profits |
| Stop | Trigger level | Fills beyond the trigger | Stop-losses, breakout entries |
| Stop-limit | Trigger and worst price | May never fill | Exits in markets prone to spikes |
| Trailing stop | Distance from price | Stopped out by normal noise | Protecting profit in a trend |
Time in force
Orders also carry an instruction for how long they stay active:
- Good till cancelled (GTC): stays in the book until filled or cancelled.
- Day: expires at the end of the trading session.
- Immediate or cancel (IOC): fills what it can immediately and cancels the rest.
- Fill or kill (FOK): fills completely and immediately, or not at all.
Which order to use
The market order vs limit order choice comes down to speed versus price. If you must exit now, use a market order and accept some slippage. If price matters more than speed, use a limit order. Protect every leveraged position with a stop-loss, and remember that a stop limits your loss only as well as the market's liquidity allows. Our risk management guide covers how to set stops and size trades around them.
Frequently asked questions
What is the difference between a market order and a limit order?
A market order executes immediately at the best available price, so you control timing but not price. A limit order executes only at your chosen price or better, so you control price but not whether it fills.
Why did my stop-loss fill at a worse price?
A triggered stop becomes a market order. In a fast move or after a price gap, the next available price can be well beyond your stop level. This is called slippage.
Are limit orders cheaper?
Often, yes. On many exchanges a limit order that waits in the book is charged the lower maker fee, while a market order pays the taker fee.