Order types

This lesson explains the main order types, how they execute, and how to choose the right one for your entry, exit, and risk control. It is designed for someone who has chosen an instrument and now needs to control the price and timing of the trade without turning execution into gambling.

Three basic orders

Market

A market order executes immediately at the best available price. Use it when speed matters more than exact price. In low liquidity or around news events, you may get a worse price than expected — this difference is called slippage. On CFD markets, the spread can widen suddenly, and a market order in that moment is a conscious decision to accept that risk.

Limit

A limit order buys at no more than X or sells at no less than Y. It gives you price control without a fill guarantee. A buy limit below the market waits for a pullback; if the price never returns, you simply do not get the position, which is sometimes an advantage.

Stop

A stop order activates once the price crosses a level. A stop-loss limits loss when the setup is invalid. A stop-entry is sometimes used to enter on a breakout above resistance. After activation, the behaviour depends on the platform — it may become a market order or a stop-limit order — so check the rules at your broker before relying on it.

Cheat sheet

Educational example: you want to buy a CFD on an index at a retest of 2500. A limit buy at 2500 gives price control. If you are afraid the price will run away without you, a market order accepts the prevailing price. Place the stop-loss below the swing low, not below a round number just because it looks clean.

Exchange-specific orders

On some regulated exchanges, the same goal is achieved with a different order type than on CFDs. Three types worth distinguishing:

PCRO is especially interesting for beginners: it gives market speed together with a firm price limit. If you fear that a market order in an auction will fill at an absurd price, PCRO is the answer. Many retail investors do not know this type exists and choose between market and limit, losing the benefit of both.

Orders also have expiry rules (for example, valid for the session, valid until the end of the next trading day, or good until cancelled). An order without a consciously set expiry can disappear at the moment you expected it to remain active. Order names and availability differ between brokers, so confirm them in your account documentation instead of assuming they work identically everywhere.

During opening and closing auctions, orders behave differently than in continuous trading. A market order submitted in an auction enters a matching book and does not execute instantly. That is not a minor technical detail: it is the difference between the price you saw and the price you actually got.

Conditional orders (overview)

These tools automate plan execution, but they do not replace the plan. A trailing stop set without a pre-planned distance can easily shake you out on normal noise, just like a fixed stop set too tightly.

Measure your slippage instead of fearing it

Slippage is not an abstraction — it is a number you can calculate for your own account. Protocol:

1. Before clicking, record the price you see on the chart (expected_price).
2. After fill, record the actual execution price from the confirmation (fill_price).
3. slippage = |fill_price - expected_price| in points
4. share = slippage / ATR(entry timeframe) as a percent of the candle range
5. Record the direction: did it help or hurt you?

After ten orders, calculate the average of step 4 separately for market and limit orders. You will see one of two things: either slippage is negligible and your fears were unjustified, or it is material — and then you know that market orders on your timeframe are not free.

When an order says do not trade

1. The spread is wider than normal — a market order in that moment is not plan execution; it is paying a penalty for haste.
2. You are in an auction whose mechanics you do not understand — if you do not know whether your order enters the matching book, do not submit it as an experiment.
3. The stop-loss is placed where there is no setup invalidation — the stop is not a target, not a pretty level; it is the place where you declare the setup wrong.
4. The order has no defined expiry — an order that expires unexpectedly gives a false sense of protection.

Order types across instruments

The mechanics of market, limit, and stop are universal, but their practical consequences differ between asset classes. Who is your counterparty and where the trade settles for each class is compared in the lesson Instruments and markets. On a regulated exchange, auction opening and closing orders behave differently than during continuous trading. In crypto, a stop-loss set over the weekend may trigger at much lower liquidity than on weekdays, increasing slippage risk. On futures, a stop-entry used for breakout trading requires additional awareness of whether a contract roll is approaching — an active order left on an expiring contract becomes worthless after expiry.

In a brokerage account, limits and markets work during exchange sessions. In FX or CFD markets, trading is almost 24/5, but overnight liquidity is often worse. Always read the execution conditions in your broker’s documents — more in the lesson Broker, demo, and costs — supervision by the KNF or an EU authority does not remove that duty. The size of your stop should be recalculated using the 1–2 per cent risk rule.

Common beginner mistakes

• Skipping the stop-loss because you believe the price will reverse.
• Setting the stop too tight below an obvious level, making it easy to hit on noise.
• Using market orders around news without understanding the spread.
• Confusing stop-loss with limit orders when reversing a position.
• Treating stop-loss as a target instead of setup invalidation.
• Failing to check which order type was actually sent — the platform may have converted a stop into a stop-limit without your knowledge.

Exercise

On a demo account, run this procedure:

1. Open three educational positions on the same instrument: market, limit, and stop-entry.
2. Before you click, record the price you see on the chart.
3. After the fill, record the actual execution price from the confirmation.
4. Record the spread at the moment you clicked.
5. Repeat the procedure with ten orders and fill in the slippage table above.
6. Compare the average slippage for market orders and for limit orders.

The goal is to see the difference in execution, not to make money on demo. This is the first moment you see your own execution cost as a number rather than a fear.

Measurable exercise

Choose one demo instrument. Record: capital, 1 per cent risk in USD, distance to invalidation, the resulting size, and whether you end the session after a −2R limit. One row in a sheet beats three hunches from a chat.

Common questions

Does a stop-loss always close exactly at the level?

No. On a gap, around news, or in a thin order book you may get a worse price (slippage). A stop limits risk conceptually; it is not a guarantee of a one-to-one fill.

What is a stop-limit order?

Once the level breaks, a limit order is activated instead of a market order. It protects you from a terrible fill, but it may not fill at all — check the name and logic on your platform.

How does PCR differ from PCRO on the GPW?

PCR executes at any available price from the order book. PCRO is the same but with your price limit — it will not fill worse than the price you set. If you want immediate execution but do not want to risk an extreme fill, PCRO is usually the right choice. Confirm the availability of order types with your broker.

Do the same names mean the same thing on the GPW and on CFDs?

The market, limit, and stop principle is similar, but the session, market depth, and execution model differ. Practise on the product you actually trade.