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  1. Introduction To Order Types: Introduction
  2. Introduction To Order Types: Long And Short Trades
  3. Introduction To Order Types: Market Orders
  4. Introduction To Order Types: Limit Orders
  5. Introduction To Order Types: Stop Orders
  6. Introduction To Order Types: Conditional Orders
  7. Introduction To Order Types: Duration
  8. Introduction to Order Types: Conclusion

Knowing how to trade is as important as knowing when to trade. Understanding the different order types and how to apply them can help you streamline the order entry process, avoid unnecessary losses and improve your trading results.

Advanced order types such as OCO and OSO orders act as a basic form of trade automation, since many of the orders, once defined, are handled by your trading platform. Trade automation, whether at a basic level or as a fully automated trading system, can help you control emotions, avoid costly pilot error mistakes and protect open trades with profit targets, stops and trailing stops. (For more, see The Pros and Cons of Automated Trading Systems.)

Here’s a quick review of the different order types we covered in this tutorial:

  • Long and short trades. There are two types of trades: long and short. Traders go long when they expect price to rise and short when they expect price to fall.

 

  • Market orders. Use a market order to guarantee a fill. A market order is the fastest and most reliable way to get in out of a trade, and is appropriate if getting filled is more important than getting a certain price.

 

  • Limit orders. Use a limit order to guarantee a price. A limit order allows precise order entry, and is appropriate if getting a specific price is more important than getting filled.

 

  • Stop orders. Use a stop order to trigger a market or limit order once a specified price has been reached. A stop order is appropriate when it is important to confirm the direction of the market before entering a trade.

 

  • Conditional orders. Use a conditional order to place orders that will be submitted or canceled only if specified criteria are met. A conditional order is appropriate when it is important to automate part or all of the trade entry/exit order entry process.

 

  • Duration. Specify how long you want an order to be in effect by selecting an order duration. 

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