Entries & Limit Orders
Market, limit and stop orders, and when each one fits.
Overview
How you enter determines the price you get, the fees you pay and whether you get filled at all. The order type is a small decision that compounds across hundreds of trades.
The Order Types
Market Order
Executes immediately at the best available price. Guarantees a fill, but not a price. In thin markets or fast moves, the realised price can be noticeably worse than expected.
Limit Order
Executes only at your specified price or better. Guarantees a price, but not a fill. Price may reach your level and reverse without filling, or never arrive at all.
Stop Market
Becomes a market order once a trigger price is reached. Used for stop losses and for breakout entries.
Stop Limit
Becomes a limit order once triggered. Offers price control, but carries the risk of no fill in exactly the fast conditions where you most need one — which is why stop losses are usually better as stop market orders.
Maker and Taker Fees
Most exchanges charge differently depending on whether you add or remove liquidity.
- Maker: Your limit order rests in the book. Lower fee, sometimes zero.
- Taker: Your order executes immediately against the book. Higher fee.
The difference looks trivial per trade and is substantial over a year of active trading. For a trader placing several hundred trades annually, defaulting to limit orders is a meaningful edge on its own.
Choosing an Approach
Limit Orders at Levels
If your plan is to buy support, place a limit order there in advance. You get the price you wanted, you pay the lower fee, and the decision is made calmly rather than while watching price move.
Market Orders on Confirmation
If your plan requires seeing a candle close before entering, a market order is appropriate. You are paying the spread and the higher fee in exchange for confirmation.
Scaling In
Rather than one entry, some traders split the position across several limit orders through a zone. This improves the average entry if price runs deeper, and guarantees partial participation if it does not.
The cost is complexity and more fees, and it must be planned in advance. Adding to a losing position that you did not plan to scale into is averaging down, which is a different thing entirely.
Weaknesses & Limitations
- Limit orders can be missed entirely by a single tick
- Market orders suffer slippage exactly when volatility is highest
- Resting orders at obvious levels are visible and sometimes targeted
- Scaling in increases fee drag and complicates management
Example Use
A trader plans to buy a support zone between 96 and 98. They place two limit orders, half the position at 98 and half at 96.5, with a single stop below the zone. If only the first fills, they hold a half position with the same defined risk.
Risk Management Notes
Place the stop as soon as the entry fills, not afterwards. The gap between being filled and being protected is where accounts are damaged, because it is precisely when a fast adverse move is most likely.