Market Orders, Limit Orders and Stop Orders are different ord<a href="http://tradinghubonline.com/blog/wp-content/uploads/2015/10/35808715_s.jpg"><img class="wp-image-1640 alignleft" src="http://tradinghubonline.com/blog/wp-content/uploads/2015/10/35808715_s.jpg" alt="Market Orders, Limit Orders and Stop Orders" width="150" height="106" /></a>er types a trader can use to enter a trade. You will use each of these orders under certain circumstances to reach a specific goal.
<h2><span style="color: #3366ff;">1. Market Orders:</span></h2>
<p style="text-align: justify;">A market order is used when you want to enter the market immediately at the best available current price. The market order is normally the default order in most trading systems.</p>
<p style="text-align: justify;">A market order guarantees execution, but it does not guarantee a specific price.</p>
<p style="text-align: justify;">Before you enter a market order you must make sure what the Bid/Ask spread is. In a market with low volume, or in a period of high volatility you run the risk of getting a fill at a much higher or lower price than what you were prepared to pay.</p>
<p style="text-align: justify;">Large orders may take time to fill and prices might move away from your intended price.</p>
<p style="text-align: justify;">But, if prices break important levels and your trigger signals give a buy or sell, a market order might be the quickest way to enter the trade.</p>

<h2 style="text-align: justify;"><span style="color: #3366ff;">2. Limit Orders:</span></h2>
<p style="text-align: justify;">With a limit order the price is guaranteed but you are not guaranteed to get a fill. A limit order might give a trader a bit more control over the price they will buy or sell at. You can set the price you are prepared to trade. The risk is that prices may never reach your target price.</p>
<p style="text-align: justify;">A limit order is very useful to enter a market on a pull back to a pre defined level, or to take profits at a certain level when you are in a trade. These levels will often be on a support or resistance line.</p>
<p style="text-align: justify;"><span style="color: #993300;">Limit order example</span>
If you look at this chart:</p>
<p style="text-align: justify;">Your analysis showed you that there is a long term support line on a certain level. You decided that this support line will be a great buy if prices retrace back to it.<a href="http://tradinghubonline.com/blog/wp-content/uploads/2015/10/Example-of-a-limit-order-1oct15.png"><img class="size-full wp-image-1637 alignright" src="http://tradinghubonline.com/blog/wp-content/uploads/2015/10/Example-of-a-limit-order-1oct15.png" alt="Example of a limit order 1oct15" width="269" height="182" /></a></p>
<p style="text-align: justify;">You will enter your limit Buy Price one or two ticks above the support line. If prices retrace back to your level you will get a fill.</p>
<p style="text-align: justify;">Normally price have to touch your level to get a fill, price does not have to trade through your level.</p>
<p style="text-align: justify;">Your only risk is that there might be other large orders lying at the same level as yours, and that you might then not get a fill when volume is low.</p>

<h2 style="text-align: justify;"><span style="color: #3366ff;">3. Stop Order</span></h2>
<p style="text-align: justify;">A trader will use a stop order to buy or sell an instrument when price passes through a pre-determined level. When price trade through your stop order level the stop order become a market order.</p>
<p style="text-align: justify;">You will for example use a stop order to enter a trade when your analysis show that you will get a trigger for a buy or sell when a specific support or resistance line is broken. You will enter your stop order a few ticks above a resistance for a buy, and below a support for a sell.</p>
<p style="text-align: justify;">You will use a stop order when you enter a StopLoss to protect an open position as part of your risk management.</p>
<p style="text-align: justify;">The advantage of a stop order is that you can enter your price before the time and walk away, knowing that your order should be filled when prices break the your pre-defined level.<a href="http://tradinghubonline.com/blog/wp-content/uploads/2015/10/Example-of-a-stop-order-1oct15.png"><img class="size-full wp-image-1638 alignright" src="http://tradinghubonline.com/blog/wp-content/uploads/2015/10/Example-of-a-stop-order-1oct15.png" alt="Example of a stop order 1oct15" width="294" height="166" /></a></p>
<p style="text-align: justify;"><span style="color: #993300;">In this example</span> your analysis showed that you must buy if price break to the top, through the resistance line. You will enter you buy stop order a few ticks above the resistance line. You will get a fill if price trade through your level.</p>
<p style="text-align: justify;">A risk to keep in mind is that you may get slippage if there is a very volatile movement when prices break the strong support or resistance line. Your fill price might be a few ticks away from where you actually entered it.</p>
<p style="text-align: justify;">Be careful to use a stop order before important market news or in a market with low liquidity.</p>