The order types
| Order | Sits | Fills | Use |
|---|---|---|---|
| Market | Now | At the best available price; can slip | Enter or exit immediately |
| Buy limit | Below the price | At its price or better | Buy a dip |
| Sell limit | Above the price | At its price or better | Sell a rally; take profit on a long |
| Buy stop | Above the price | As a market order once triggered; can slip | Buy a breakout; stop loss on a short |
| Sell stop | Below the price | As a market order once triggered; can slip | Sell a breakdown; stop loss on a long |
| Stop loss | Attached to a position | As a market order when triggered | Cap the loss |
| Take profit | Attached to a position | As a limit order | Bank the gain |
| Trailing stop | Attached, follows price | As a market order when triggered | Lock in profit as a trade runs |
Limit versus stop
The two are mirror images and the most common platform error is confusing them. A limit waits for a better price than now; a stop waits for a worse one. If you want to buy at 1.0950 while the price is 1.1000, that is a buy limit. If you want to buy at 1.1050 once the price gets there, that is a buy stop.
What can slip
Anything that becomes a market order when triggered: market orders, stop orders and stop losses. Anything that fills as a limit cannot fill worse than its price: limit orders and take profits. In a gap a stop loss fills at the first price on the far side; a guaranteed stop, where offered, fills at its exact level for a premium.
Good habits
- Attach the stop and target when you place the entry, not afterwards.
- Give pending orders an expiry and review them every session.
- Check the volume field twice.
- Leave one-click trading off until you are practised.
Trading forex, CFDs and other leveraged products carries a high risk of losing money. This guide is general education, not advice.