This article will explain the difference between the three major order types available on our advanced trading screen and teach you when you should use them.
For instructions on how to set this type of order in the Binance.US trading interface, you can also view these separate instructional guides: one for How to Place Market and Limit Orders, and one for How to Place a Stop-Limit order.
What is a Market Order?
A Market Order is used to make an immediate buy/sell. Market orders are executed instantly at the current market price.
Market Order Examples:
- Market Buy: The current price of BTC is $21,000. You place an order to buy $210 USD worth of BTC at the market price. You will receive 0.01 BTC ($210 / $21,000).
- Market Sell: The current price of BTC is $21,000. You place an order to sell 0.01 BTC at the market price. You will receive $210 USD in exchange for 0.01 BTC ($21,000 X 0.01).
When to Use:
- You want to complete your trade immediately. You're either willing to accept the current market price for convenience, or you think that the current price is a good deal and likely go higher (if buying) or lower (if selling) in the future.
How to Use:
What is a Limit Order?
A Limit Order is used to buy/sell crypto at a specific price. It requires patience as the order will not be filled unless the asset reaches the price you specified (potentially never). When you set a limit order, you choose the amount of crypto you want to buy/sell, and the price you want to pay/receive. Your order is only filled if the price reaches your desired target.
Limit Order Examples:
- Limit Buy: You set a limit order to buy 0.025 BTC at $20,000 (per BTC). If the price of BTC reaches $20,000 your order will automatically be filled at that price, you will therefore pay $500 USD for 0.025 BTC ($20,000 X 0.025).
- Limit Sell: You set a limit order to sell 0.025 BTC at $25,000 (per BTC). If the price of BTC reaches $25,000 your order will automatically be filled at that price, you will therefore receive $625 USD ($25,000 X 0.025).
When to Use:
- You are not in a rush to buy or sell. Rather, you have an ideal price target that you want to enter the market or take profits at and want to set your order to automatically fill if that price is reached.
How to Use:
What is a Stop-Limit Order?
A Stop-Limit Order is used to place a Limit buy/sell order once the market price reaches the designated Stop price. A stop price is a trigger for the limit order to be placed, and the limit order is the maximum (or minimum) amount that you will pay/receive.
Stop price: When the current asset price reaches the given stop price, a limit order is placed to buy/sell the asset for no more (or less) than specified by the limit price.
Limit price: The selected (or potentially better) price at which the stop-limit order is executed.
Stop-Limit Order Examples:
- Stop-Limit Buy: Bitcoin is priced at $19,500 USD with a resistance level (a price that it is having trouble passing) of $20,000. You think that if it can just get past $20,000 it will continue to rise higher. You set a stop-limit order with a stop of $20,000 and a limit of $20,500. If the price reaches or passes $20,000 the stop will trigger your limit order and automatically attempt to fill your order without paying any higher than $20,500.
- Stop-Limit Sell: You bought Bitcoin at $18,000 USD and it is currently priced at $19,500. To prevent losses, you decide that you will sell if Bitcoin falls back to $18,000 (the price you paid). You set a stop of $18,200 and a limit price of $18,000. If the price falls to or below $18,200 the stop will trigger your limit order and automatically attempt to fill your order without receiving less than $18,000.
When to Use:
- You have a range of what you are willing to pay, or you want to use technical analysis and place an order based on asset resistance levels. You should also have a bit of prior experience with trading to avoid confusion.
How to Use:
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