Market or limit order?

A market order prioritizes a certain fill; a limit order prioritizes price control. It depends on which you need more in that situation.

How does a trailing stop work?

It keeps a fixed distance from the price; as the price moves in profit, the stop follows, and when the price reverses by that distance, it closes the trade.

Do pending orders always fill?

No. A limit order fills only when the price reaches your level; if the price never gets there, the order isn't executed.

Order Types | 2AiTrading

What order types are

An order type is how you instruct the venue to buy or sell: trade immediately at the current price, or wait for a preset level. Choosing the right type helps you control your entry price, exit price, and slippage.

Why it matters

For the same trading intent, different order types produce different fill prices and slippage risk. Understanding order types is also how you automate discipline: preset your stop-loss and take-profit as pending orders, instead of watching manually and being swayed by emotion.

The main types

Market order: fills immediately at the best available price. The upside is a certain fill; the downside is possible slippage when the market is moving.
Limit order: fills only at your set price or better. It controls the entry price but may not fill if the price never reaches it.
Stop order: triggers into a market order when the price hits a preset level; often used for stop-losses or to enter when price breaks a level.
Stop-limit order: combines the two; when the price hits the trigger, a limit order is placed.
Trailing stop: the stop level moves with the price as the trade profits, protecting gains.
OCO (one-cancels-the-other): places two orders at once; filling one automatically cancels the other, often used to set take-profit and stop-loss together.

How to apply it

Use a market order when you need a decisive entry or exit and accept small slippage. Use a limit order when you want tight control over the entry price and don't mind missing out. Always set a stop-loss with a stop order the moment you enter, so risk is bounded even when you step away from the screen.

A concrete example

You want to buy a stock at 100 but will pay at most 100. Place a buy limit at 100: if the price drops to 100 or lower it fills, and if it runs up you don't overpay. At the same time, place a stop-loss at 95: if the price breaks 95, the position closes automatically, capping the loss without you watching.

Common mistakes

Using market orders in thin liquidity and suffering heavy slippage.
Not setting a stop-loss on entry, leaving risk open-ended.
Placing a limit order too far away so it never fills, missing the opportunity.
Confusing a stop with a limit, causing unexpected fill behavior.

FAQ

Market or limit order? A market order prioritizes a certain fill; a limit order prioritizes price control. It depends on which you need more in that situation.
How does a trailing stop work? It keeps a fixed distance from the price; as the price moves in profit, the stop follows, and when the price reverses by that distance, it closes the trade.
Do pending orders always fill? No. A limit order fills only when the price reaches your level; if the price never gets there, the order isn't executed.

Checklist

☐ Does my chosen order type fit my entry/exit goal?
☐ Have I already set a stop-loss?
☐ If using a market order, is liquidity enough to avoid heavy slippage?
☐ If using a limit order, do I accept it may not fill?