Bid, Ask, Market Orders, and Pending Orders
Learn how orders are executed and when market, limit, and stop orders are appropriate.
Order type controls how a trading idea enters the market. The correct choice depends on whether confirmation, price improvement, or immediate execution matters most.
Market Execution
A market order requests execution at the best available price. During fast conditions, the final fill can differ from the price displayed because liquidity changes before execution completes.
Slippage is not always negative; it may improve or worsen a fill. Traders should test around news and session openings where execution conditions can change quickly.
Pending Orders
Buy limits and sell limits seek entry after a pullback. Buy stops and sell stops seek entry after price breaks through a trigger level.
Pending orders should include an expiry or regular review. A setup can become invalid even when the order price has not yet been touched.
Practical Checklist
- Match order type to the setup logic.
- Set invalidation before activation.
- Remove stale pending orders.