Order Types and Execution: Market, Limit, and Stops
When to use each order type, slippage, and how stops interact with volatility and spread.
17 min read
Introduction
Execution quality is half your edge on short timeframes. Market orders fill now at the best available price; limits rest until touched; stops become market orders when triggered — each has trade-offs in fast markets.
Market vs limit
Use market orders when you need immediate exposure and accept slippage. Use limits when you demand price but may miss the move.
In thin liquidity or around news, slippage widens — size down or avoid.
Stops and gaps
A stop-loss does not guarantee exit at your price; gaps and spread spikes can fill worse.
For swing positions, consider volatility-adjusted distance rather than arbitrary pip counts.
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