Your order type decides when and at what price you get in and out.
Market order
"Get me in now!" Instant fill at the best available price. In fast markets you may get slippage: a slightly different price than you clicked.
Pending orders
| Order | Where | Use it when |
|---|---|---|
| Buy limit | Below price | You want to buy a dip into support |
| Sell limit | Above price | You want to sell a rally into resistance |
| Buy stop | Above price | You want to buy a breakout |
| Sell stop | Below price | You want to sell a breakdown |
Wick says
Memory trick: LIMIT orders want a BETTER price than now. STOP orders chase momentum.
Exit orders
- Stop loss: closes the trade at a set loss. Non-negotiable.
- Take profit: closes at a set profit.
- Trailing stop: follows price to lock in gains.
Rookie mistake
Placing a stop loss "in your head." Mental stops have a funny way of moving when price gets close.
Key takeaways
- Limits buy cheaper or sell higher; stops trade breakouts.
- Every trade gets a stop loss before you walk away.
- Trailing stops protect profits in trends.