Course: Trading Mechanics·Lesson 1 of 2·7 min read·Last reviewed 8 May 2026
Order types explained
Market, limit, stop — what each one actually does when you click send.
James Okonkwo
Ex-market maker · 11 yrs FX options · CMT
By the end of this lesson you'll be able to:
- Match order type to intent (speed vs price control)
- Explain when a stop order becomes a market order
- Avoid using market orders by default
Three orders you will actually use
A market order prioritizes speed: you get filled now at the best available price. A limit order prioritizes price: you only trade at your level or better. A stop order waits until price reaches a trigger, then behaves like a market order unless you use stop-limit.
Common mistake
Using market orders on illiquid pairs because "it's faster." Speed without a price ceiling is how slippage eats beginners alive.
Quiz — Test your understanding
1. A market order guarantees:
2. A limit buy at 1.1000 will fill when:
3. A stop-loss order is primarily used to:
Next lesson
Understanding slippage
- Define slippage in your own words
- List two market conditions that widen slippage
6 min readContinue to next lesson