Lesson B2 · Part B: Mechanics5 of 106 min
Market, limit and stop orders
How to tell your broker exactly what you want — and how to leave the exit plan in place before you enter.
§1Getting in
A market order fills immediately at the best available price. A limit order waits for a better price (buy below, sell above the current market). A stop entry waits for price to break out (buy above, sell below).
§2Getting out
A stop-loss closes the trade if price moves against you to a chosen level. A take-profit closes it when your target is hit.
Placing both at entry turns a vague idea into a defined plan: you know the maximum loss and the target before any money is at risk.
In fast markets, stops can fill at a worse price than requested — this is called slippage.
remember this:
- Market = now. Limit = better price. Stop = breakout.
- Set stop-loss and take-profit when you enter, not later.
- Slippage can happen during news and gaps.
Checkpoint
Q1.EUR/USD is at 1.0850. You want to buy only if it dips to 1.0820. Which order?
Q2.What is slippage?