💡Order Types

In trading, mastering the art of precise execution is crucial. One of the most valuable tools at a trader’s disposal is the buy/sell order. In this article, we will explore the different types of orders, how they function, and why they are indispensable in trading.

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🎯 Limit Order

A Limit Order is an instruction to buy or sell an asset at a specified price or better. Unlike market orders, which are executed immediately at the current market price, limit orders remain pending until the market reaches the specified price level. Essentially, they act as triggers, activating a trade when market conditions match the price desired by the trader.

📈 For Long Positions:

A limit order sets the maximum price at which you are willing to buy the asset. This is a way to ensure you do not pay more than the desired price. For example, if you want to buy Bitcoin at $45,000, you can place a limit order at this price or lower. If the market reaches the specified price or drops below it, your order will be executed.

📉 For Short Positions:

In a short position, the limit order sets the lowest price at which you are willing to sell the asset. It allows you to initiate a short position when the market hits the desired price or rises above it.

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🛑 Stop-Limit Order

A Stop-Limit Order combines two key elements: the stop price and the limit price. This conditional order is placed by traders to execute a trade at a specified price (limit price) or better, but only after a certain price level (stop price) is reached or breached. These orders provide traders with a high level of control over the execution of their trades.

📈 For Long Positions:

A stop-limit order combines elements of both stop and limit orders. First, you set the stop price (e.g., $48,200 for Bitcoin). If the market price rises to or above this stop price, your order becomes a limit order to buy at a specified price (e.g., $48,000). This ensures that you will only buy if the market moves in the desired direction.

📉 For Short Positions:

In a short position, a stop-limit order is used to manage risk. You set the stop price (e.g., $41,800 for Bitcoin), and if the market reaches this price or drops below it, your order becomes a limit order to sell at a specified price (e.g., $42,000). This helps protect you from potential losses by automatically triggering a sell order if the market moves against your short position.

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🚀 Stop-Market Order

A Stop-Market Order is a powerful tool that opens a position when a specified stop price is reached and is executed at the current market price. It allows traders to quickly respond to market changes, ensuring the trade is executed when the market reaches or exceeds the set price threshold.

📈 For Long Positions:

This order allows traders to set a stop price for buying, which is especially useful when forecasting price growth. The order activates when the market price reaches or exceeds the stop price, allowing the trader to enter the market early in the anticipated uptrend.

📉 For Short Positions:

In the context of short positions, the order is used to set a stop price for selling, to protect the trader from potential losses if the asset price is expected to fall below a certain level. When the asset’s market price reaches or falls to the stop price, the order is executed, minimizing losses or securing profits.

Unlike the stop-limit order, which requires both a stop price and a limit price, the stop-market order is executed immediately at the market price once activated. This makes it ideal for traders who need to respond quickly to market fluctuations without the risk of delays.

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⏳ Expiry of Orders

All orders, including stop-limit orders, have an expiration date set to 60 days. This expiration serves several important purposes:

1. Maintaining smart contract efficiency: The expiration helps prevent the accumulation of inactive and outdated orders that no longer align with current market conditions.

2. Regular review of trading strategies: Setting an expiration date encourages traders to regularly update their strategies and adapt to the evolving market conditions.

Note: An order can only be executed if the entire volume for opening positions is available. Initialization may take up to 20 seconds, and execution speed depends on the network load of the TON blockchain.

🏄 Mastering the types of orders is a step towards confident and strategic trading.