What are Market Orders, Limit Orders, and Conditional Orders, and How to Place Them

There are three main types of orders when trading cryptocurrency on the Bitflex platform: market orders, limit orders, and conditional orders. Let’s see how each on them work and how to place them on Bitflex.

What is a market order?

It is an order that is matched immediately at the best available price. In this type of order, traders are able to set the leverage and position size, but not the executed price. The order will be matched to the next best price in the order book and filled accordingly. 

Market orders come in extremely handy during high volatility when a trader wants to enter or exit the market immediately. However, at the downside, their order might get filled at a higher price compared to the index price. 

What is a limit order?

It is a type of order that lets trader select a specific price at which they want to buy an asset. The order automatically gets filled when the selected price is met. In this type of order, traders are able to set the leverage and position size along with the desired order price. 

These types of orders help traders buy assets at the best price, but there is no guarantee that the order will get executed. It might take seconds, minutes, hours, days, or weeks for the order to get filled depending on the market conditions.

For example, the current market price of BTCUSDT is $20,000. You place a limit order to buy 1 BTC at $19,000. After a week, the price of BTCUSDT came down to $19,000. As the market price crossed your limit price, the order was executed, depending on market liquidity. If there are other BTCUSDT orders in the order book before you, those orders will be executed first. Your order will only be executed afterwards if there is enough liquidity in the market. Therefore, you should make sure that you keep up with market conditions to ensure that your limit order is executed.

What is a conditional order? 

A conditional order is an order that is executed only when a certain criteria is met. You can customize the criteria based on your own specifications to make sure that the order is executed at the right time.

To place a conditional order, you have to specify a trigger price and a limit price or market price. Your trigger price is the price when the order will be activated. After the order is activated, it will be executed for the limit price or the market price that you have selected.

It is an extremely useful tool when traders are uncertain about market conditions. The trigger or stop price is usually set a trend break either at a support or a resistance zone. When the trigger is met, the limit order is placed to buy or sell the asset at a predetermined price. 

Here are different types of conditional orders:

Market Order: In this type of conditional order, the order will be executed at market price once it has been triggered.

Limit Order: In this type of conditional order, the order will be executed at limit price once it has been triggered.

For example, suppose that the current market price of BTCUSDT is $20,000. You want to purchase 1 BTC at $19,000 but only if the price of BTCUSDT reaches $18,700 and goes back up to $19,000. You can use a conditional order to do so by setting the trigger price at $18,700 and the limit/market price at $19,000. Your order will be fulfilled if this criteria is met and there is enough margin in your account.