What is the Difference between Market Order?
There are different types of stocks trader orders which a trader can use to trade in Stocks.
At the foundation of successful stocks is making use of the correct stocks trading order for its correct purpose. The most important things to remember about is stocks orders: Always understand the stocks orders you place and never place a stock order which as a trader you are not entirely knowledgeable about. Definitions of the commonly used types of stocks trading orders:
Stocks Trading Market Orders & Stocks Trading Pending Orders
Stock Trading Market Order
Market order is the most basic type of stocks order, market order is used to buy or sell at the current ask or bid quote price. This refers to the quoted stocks price which pops up on your stocks trading software.
This type of stocks order is used for buying or selling according to the current exchange rate quotation in stock trading, the execution is instant. The minute you want to enter a stocks trade you can buy and sell at the current stocks price at a click of a button using a stocks market order.
Pending Stocks Orders
These are stocks orders used to open a new stocks trade position after the stocks market reaches a stocks price specified by the trader.
Entry orders are used to buy or sell when price when it attains a certain stocks price target.
When a specific stocks price level is reached or broken then a pending stocks order is executed.
These Pending Stocks Orders are used to enter a trade at a specified price level. It is almost impossible to monitor the stock market every second and this is why a stocks trading order can be used by a stocks trader. If you feel the stock trading market stocks price may take a certain action, such as break through a specific stocks price level that it has been touching but it has not been able to break, you would want to use an Stock Trading Pending Order. Once the stocks market crosses your specified stocks price level, your pending stocks order trade order will then be executed.
There are two different types of pending orders - stocks trading limit order and stocks trading stop order.
Stocks Trading Limit Order
An order to buy or sell at a certain limit.
An stocks trading limit order can be used to buy below the current stocks price or sell above the current stocks price.
When buying, stocks trading limit order is executed when the price falls to your limit region.
When selling, stocks trading limit order is executed when the price rises to your limit region.
These Stocks Trading Limit Orders are placed by traders when they expect the stocks market to bounce back after reaching the retracement stocks price level at which the stocks limit stocks trading order was placed.
Buy Limit Stocks Order Specifies to buy at a level below the current stocks market stocks price
Sell Limit Stock Order Specifies to sell at a level above the current stocks market stocks price
Stock Trading Stop Order
A stocks trading stop order is a pending stocks order that is used to buy above the current stocks price or to sell below the current stocks price.
When buying, stocks stop order is executed as the stock trading market goes up & hits the buy stop level.
When selling, stocks stop order is executed as the stock market goes down and hits the sell stop level.
- Buy Stop Stocks Order Specifies to buy at a level above the current stocks price.
- Sell Stop Stock Order Specifies to sell at a level below the current stocks price.
What is the Difference between Stop Stocks Orders & Limit Stock Orders in Stocks?
How to Differentiate Between Stop Stock Orders & Limit Stocks Orders
Stop orders are set to buy above or to sell below the current market stocks price
Limit orders are set to buy or sell at a better stocks price after a stocks price retracement.
It is easier to first of all remember one concept. The easier concept is that of Stop Stock Orders - Stop Stocks Orders are set above and below the current market stocks price.
To learn how to set up these pending stocks trading orders read the courses:
Setting up Buy Limit Stock Order and Sell Limit Stock Order in MT4
Setting up Buy Stop Stock Order & Sell Stop Stock Order in MT4
What is the Difference between Market Order - Stop Stock Order & Limit Stocks Order
