Order types explained: market, limit, stop and bracket orders
What market, limit, stop, stop-limit, bracket (OCO) and trailing stop orders do, what each one guarantees, and which to use for entries and stop losses.
Every trade starts with an order, and the order type decides two things: whether you get filled, and at what price. Most beginners only ever use one button and find out what it really does on a fast day, when the fill is worse than they expected or the stop they thought they had never triggered. Here are the order types you'll actually use, in plain words.
Market order: fill me now
A market order buys or sells right away at the best price available. You're guaranteed a fill, but not a price. On a calm day in a busy market like the E-mini S&P 500, that's usually the price you see. On a news release or in thin overnight hours, it can be several ticks worse.
Use it when getting in or out matters more than the exact price, like closing a trade that's going wrong.
Limit order: only at my price or better
A limit order sets the worst price you'll accept. A buy limit fills at your price or lower; a sell limit fills at your price or higher. You're guaranteed the price, but not a fill. If the market never trades at your price, or only touches it briefly, you may not get filled at all.
A buy limit sits below the current price and a sell limit sits above it. Traders use limits to enter on a pullback and to take profit at a target.
Stop order: act when price gets here
A stop order (also called a stop-market order) waits until the market trades at your stop price, then becomes a market order. A sell stop sits below the current price and a buy stop sits above it.
- As a stop loss: you're long at 21,500 and place a sell stop at 21,480. If price falls there, you're taken out.
- As a breakout entry: you want to buy only if price breaks above 21,550, so you place a buy stop at 21,550.
Because it becomes a market order, a stop can fill worse than the stop price in a fast move. That's called slippage. It still gets you out, which is the point.
Stop-limit order: a stop with a price cap
A stop-limit triggers at the stop price like a stop, but then becomes a limit order instead of a market order. It protects you from a terrible fill, but if price jumps past your limit, it may never fill and you stay in the trade. That's why most traders don't use stop-limits for stop losses. A stop loss that might not work isn't really a stop loss.
Bracket and OCO orders: entry, stop and target together
A bracket order sends your entry along with a stop loss and a profit target. As soon as the entry fills, the stop and target go in automatically. They're linked as OCO, one cancels the other: when the target fills, the stop is cancelled, and the other way round.
A bracket means your stop is in the market the moment you're in a trade. For prop traders, that one habit prevents a lot of blown accounts.
Trailing stop: a stop that follows price
A trailing stop moves with price by a fixed distance as the trade goes your way, and stays put when it doesn't. If you're long with a 10-point trailing stop and price climbs 30 points, your stop climbs 30 points too. It locks in profit, but a normal pullback can also take you out early.
Don't confuse it with a trailing drawdown, which is a prop firm rule about your account, not an order. More on that in trailing drawdown explained.
Quick comparison
| Order | Guarantees | Risk | Common use |
|---|---|---|---|
| Market | A fill | A worse price in fast markets | Get out now |
| Limit | Your price or better | No fill at all | Entries on pullbacks, profit targets |
| Stop | A fill once triggered | Slippage past the stop | Stop losses, breakout entries |
| Stop-limit | No fill worse than your limit | No fill, still in the trade | Rarely a good stop loss |
| Bracket / OCO | Stop and target placed for you | Same as its parts | Every trade, ideally |
How long an order lasts
Orders also have a time in force. A day order is cancelled at the end of the session. A GTC (good 'til cancelled) order stays until it fills or you cancel it. Forgotten GTC orders filling days later are a classic, expensive surprise, so check your working orders at the end of every session.
In your journal
When you review a trade, note whether you entered with a limit, a stop or at market, and whether your stop was in the market from the start. Over a few weeks you'll see if your market-order entries are costing you more than you thought. Market Matrix imports your real fill prices, so the P&L you see is what actually happened, not what you planned.
This article is for education only and isn't financial advice. Order types and how they behave can vary by broker and platform; check your platform's help pages. Trading futures involves substantial risk of loss.