Orders and the clock
Three instructions
A market order, a limit, and a stop are three different sentences you can send to a market.
Lesson 1 of 4 • 11 min
Worked example
Study material only. It is not a signal to buy or sell. AcademyTrade is education. It is not a broker, not investment advice, and not a promise that you will make money. Trading can lose the money you deposit.
An order is a sentence. It tells the market what you are willing to do, and on what terms.
A market order says: do it now, at the best price currently offered. You pay the ask to buy, or you sell at the bid. The spread is part of the cost, and in a fast moment the fill can be worse than the last price you saw.
A limit order says: only at this price or better. It can wait. It might never be filled. That is not a failure of the order. It is the order doing what you asked.
A stop is usually the exit you wrote in advance, at the place where the idea is wrong. It becomes a market order when that price is touched, so the fill can slip past the number you chose.
Write the instruction before you need it. Deciding the order type while a candle is still printing is how a plan turns into a reaction.
- Market: now, and you pay the spread.
- Limit: this price or better, and you may wait.
- Stop: the exit that fires when the idea is wrong.
Nothing here says which instruction to send today. It says what each sentence means.