Futures trading platforms like MEXC offer traders five primary order types: limit orders, market orders, trigger orders, trailing stop orders, and post-only orders. Each type serves distinct purposes, catering to varying trading strategies and risk tolerances. Understanding these options empowers traders to optimize execution based on market conditions and personal goals.
1. Limit Orders
1.1 Definition
A limit order specifies a fixed price for buying or selling an asset. The order executes only at the designated price or better, ensuring price control but not guaranteed execution.
- Immediate Execution: If the market price matches or exceeds the limit price, the order fills at the best available price.
- Order Book Depth: Unmatched limit orders enhance market liquidity by adding to the order book.
👉 Master advanced limit order strategies
1.2 Pros and Cons
Pros:
- Price precision (no slippage).
- Ideal for disciplined entry/exit points.
Cons:
- Potential non-execution in fast-moving markets.
1.3 Use Cases
- Buying Below Market: Set a limit order at $39,000 for BTC when the current price is $40,000.
- Selling Above Market: Place a sell limit at $41,000 to capitalize on upward momentum.
1.4 Timeframes
- GTC: Active until manually canceled.
- IOC: Partial execution; unfilled portions cancel.
- FOK: Entire order cancels if not fully filled immediately.
1.5 BBO (Best Bid/Offer)
BBO automates limit orders by matching the best available bid/ask price, streamlining execution.
2. Market Orders
2.1 Definition
A market order executes immediately at the current best available price, prioritizing speed over price precision.
2.2 Pros and Cons
Pros:
- Instant liquidity access.
Cons:
- Slippage risk during volatility.
2.3 Use Cases
- Rapid entry/exit during news events or breakouts.
3. Trigger Orders
3.1 Definition
Trigger orders activate only when a predefined price (trigger price) is reached, converting into limit/market orders.
3.2 Use Cases
- Stop-Loss: Automate exits to limit losses.
- Breakout Entries: Enter trades upon hitting key resistance/support levels.
👉 Optimize trigger orders for volatile markets
4. Trailing Stop Orders
4.1 Definition
A trailing stop dynamically adjusts the stop-loss price as the market moves, locking in profits while allowing upside.
4.2 Use Cases
- Trend Following: Trail stops during uptrends to capture gains.
5. Post-Only Orders
5.1 Definition
Post-only ensures orders act as makers (adding liquidity), avoiding taker fees. Cancels if immediate execution would occur.
FAQs
Q1: Which order type minimizes slippage?
A: Limit orders guarantee price but not execution.
Q2: How do trailing stops protect profits?
A: They auto-adjust stop-loss levels as prices rise, securing gains.
Q3: Are post-only orders free?
A: Yes, they avoid taker fees by ensuring maker status.
Final Tip: Combine order types strategically—use limit orders for precision, market orders for urgency, and triggers for automation.