Limit orders and market orders
One guarantees the price. The other guarantees the fill. You cannot have both.
Should you use a limit order or a market order?
Use a limit order when entering on a plan, because it guarantees your price but may not fill. Use a market order when exiting or when momentum is the reason for entry, because it guarantees execution but not price. You can have certainty of price or of fill, never both.
Every order type on every exchange is built from two ideas. A market order says "fill me now at whatever the price is". A limit order says "fill me at this price or better, and wait if you have to".
Market order: I want it now, whatever it costs. Limit order: I want it at this price, and I can wait.
Market order
- Guarantees: execution.
- Risks: the price. In a thin book or a fast move, the fill can be noticeably worse than what you saw.
- Costs: the taker fee, plus slippage.
Limit order
- Guarantees: the price — you will never pay worse than the level you set.
- Risks: never filling. Price can touch your level, fill nobody, and leave.
- Costs: the maker fee, often lower.
The rule that covers most cases
If you decided in advance that a level is where you want in, rest a limit order there. If you need out — a stop triggering, a target hit in a fast move, or a thesis that has broken — use a market order and accept the small cost. An unfilled exit during a crash is not a saving.
The variants you will meet
- Stop-market: becomes a market order at your trigger. Reliable, imprecise.
- Stop-limit: becomes a limit order at your trigger. Precise, and may not fill when you most need it to.
- Post-only: cancels if it would execute immediately, guaranteeing maker fees.
- Reduce-only: can only shrink a position, never accidentally open a new one in the opposite direction. Worth enabling on every exit.
What a market order actually does to the book
A market order does not buy at a price. It buys the offers that exist, starting with the cheapest and working upward until your quantity is filled. In a deep book that walk is a fraction of a percent. In a thin one, your own order is what pushes the price.
This is why the same market order behaves completely differently on Bitcoin and on a small-cap token. The order type did not change; the depth did. Before placing a market order of any meaningful size, glance at the order book panel — if your quantity is a large share of the visible depth, you are about to move the market against yourself.
The order types built from these two
What each one guarantees
| Market | fills, price uncertain |
| Limit | price certain, fill uncertain |
| Stop-market | fills when triggered, price uncertain |
| Stop-limit | price certain when triggered, may not fill at all |
| Post-only | guarantees maker fees, cancels if it would fill immediately |
| Reduce-only | can only shrink a position, never open a reverse one |
| OCO | a stop and a target together; one filling cancels the other |
Two of these deserve special attention. Reduce-only should be enabled on every exit order without exception — it prevents the classic accident of closing a long and accidentally opening a short in a fast market. OCO lets you leave a trade fully managed, which matters more than it sounds: a plan you do not have to be awake for is a plan you cannot abandon at 2am.
The stop-limit trap
If you insist on stop-limit, set the limit well below the trigger — a percent or more — so it survives a fast move. But for most people, stop-market is the correct default for exits. A slightly worse fill is survivable; an unfilled stop during a cascade is not.
A simple routine
- Plan the entry level in advance. Rest a limit order there and let the market come to you.
- Place a stop-market and a target immediately after filling, ideally as an OCO pair, both reduce-only.
- Use market orders only when you must be out, or when the reason for entering is momentum that waiting would destroy.
- Split large orders rather than accepting slippage on the whole size at once.
The discipline this creates is quietly valuable. A trader who enters on limit orders has, by definition, decided the price in advance — which means they are not chasing.
Common questions
Should I always use limit orders to save fees?
No. Fee optimisation is not free — a maker order may never fill, and missing a good entry costs far more than a few basis points. Use limits for planned entries and market orders for exits and momentum entries.
What happens if my limit order only partly fills?
You hold whatever filled, and the remainder stays resting on the book until cancelled. Check your position size before assuming you got the full amount, because a partial fill changes the arithmetic behind your stop.
Why did my market order fill at a worse price than I saw?
That is slippage. The price on screen was the last trade; your order took the next available offers. It grows with your size and shrinks with book depth, and it is worst in the first seconds of a violent move.
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