Different order types may result in vastly different outcomes; it is important to grasp the distinctions among them. This article will describe the three main order types: market, limit and trigger orders—how they differ and how to choose the correct type.
It helps to think about each order type as a tool, suited to its own purpose. Whether you are buying or selling, it is important to be clear about your primary goal. Then you'll be able to determine which order type is most appropriate to attain your goal.
A limit order is an order where you are able to set the specific buy or sell price. In other words, you can decide the maximum or minimum price you are willing to buy/sell a token. After placing the order, it will be placed in the order book and will only be executed if the market price reaches this limit price. Different from a market order, limit orders are not executed immediately, which means you have to wait until the market price reaches this limit price but it gives you more control over the execution price.
How does a limit order work?
For example, you want to sell 100HTB at $20, but the current price is $10. You can place this limit order of 100HTB at $20. When the market price reaches this target price or more, then your limit order will be filled.
A market order is an order to buy or sell a token at the market's current best available price. A market order is executed immediately, but it doesn't guarantee a specified price. Market orders are optimal when the first goal is to execute the trade immediately because it is based on the limit orders already placed in the order book. One example is if you want to purchase HTB as fast as possible, then the best option is to use the market order to purchase the HTB instantly.
Trigger Order means that when the latest market transaction price reaches the trigger conditions, the system will place orders according to the pre-set price and quantity set in advance. In a trigger order, the trader’s order price gets placed automatically once the market price reaches the trigger price. Trigger orders should be used when you have some kind of prediction of future price movements and want to take a chance on that possibility.
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