As we have discussed the 2 main orders types previously, now we will continue to discuss the remaining 4 main orders here. Once you understand these 5 trading order types, you will be able to make the best combination for your trades.
3. Stop Orders (STP)
Similar to market orders, traders buy or sell an asset at the best available price in stop orders. But, the market will process these orders if it has reached a specific price.
For example, if an asset current price is 1.2476 a trader might place a buy stop order with a price of 1.2487. Then, the trader’s stop will get processed if the market trades at 1.2487 and get filled at the best price later.
Traders can use stop orders to either enter or exit a trade, typically it called a stop loss.
4. Stop-Limit Orders (STPLMT)
In stop-limit orders, traders combine a stop and a limit order to fine-tune what price they get. To open a trade, traders could place a buy stop limit at $50.85. Assume the stock currently trades at $50.50. If the price reaches $50.85 the buy stop-limit order will be executed, but only if the order can be executed at $50.85 or below.
When a trader uses stop-limit orders, the stop and limit prices of the order can be different.
Also read: How Long Does it Take to be a Profitable Trader?
5. Market if Touched Orders (MIT)
To buy the market if touched (MIT) order, price is below the current price, while the sell MIT order price is placed above the current price.
For example, assume a stock is trading at $16.50. An MIT can buy order at $16.40. If the price moves to $16.40 or below, the trigger price, then a market buy order will be sent out.
Now, you can choose which orders that suit your needs.
