What are market and limit orders?

OKX Learn

Published on Jul 17, 2023

Updated on Jul 15, 2025

FAQs

A market order instructs your trading platform to open a buy or sell position at the current market price. Meanwhile, a limit order instructs the platform to only open the position once a specific price, set by you, is met.

"Better" is subjective, and each order type offers its own advantages and disadvantages. It's important to understand these pros and cons before you begin to trade, so you can decide which is best suited to the current market circumstances, and your personal strategy and risk profile.

No order is riskier than the other. Although market orders can cause you to be exposed to high slippage during periods of volatility, there are also risks to consider from limit orders, such as the risk of lost opportunity and the complexity of deciding a limit order price. It's essential to do your own research on each order type before you commit time and money to a trade.

First, it's imperative to understand the differences and the advantages and disadvantages of each order type. Next, consider your personal preferences and priorities to see which order type is best suited to you. Whichever choice you make, it's wise to make sure you only trade with funds you're comfortable losing, and apply fundamental risk management tactics such as the use of a stop-loss.

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