Know your Orders

There are many ways you can buy and sell using different types of orders, and each way serves a purpose. Here are the basic trading order types, and when you will want to use them. Allowing market to hit your order ( trigger your  entry ) is KEY learning in my trading journey.

01. Market Orders : Simplest order type to quick buy and sell. The issue with market orders is that you don't know the exact price you are buying or selling at.Sometime this may results in big slippage.


02.Buy Limit Order : This order is place below the current price and filled only at or below the limit price .                                                                                                                                                       

03.Sell Limit Orders : This orders is placed above the current price and filled only at or above the limit price. This is often used as target to get out of trade.                                                                     

04. Buy Stop Orders : It's placed above the current price and filled at or above the STOP  price.  Zerodha call it as a SL-M order. It's useful to place stop loss and buying breakouts .                      
05. Sell Stop Orders : It is placed below the current price and will only be filled at or below the stop price.                                                                                                                                                       
06.Buy Stop Limit : Its similar to Buy Stop order except that it doesn't act ac market orders . It will only be filled at buy Stop or lower .This orders help when we want to buy at specific prices.             
07.Sell Stop Limit : Similar to Sell Stop orders except that it doesn't act as market order.                   
           

Open a Paper/ demo trading account and try them all, see how they function and how you will incorporate them into your trading strategy.                                                        

Comments

  1. Kumar RajaMay 31, 2018 at 5:00 PM

    God bless u sir. Keep teaching us. Can u write a lesson on Option trading for beginners? Or what can be done with options.

    ReplyDelete

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