Order types
Order types are the categories of trading instruction sent to a broker.
The four core types are market orders (execute immediately at best available price), limit orders (execute only at a specified price or better), stop orders (execute as a market order once a trigger price is reached), and stop-limit orders (combine the two).
This page covers the mechanic; it is not trading advice.
Order behaviour at a real price
A buy market order on EUR/USD with the ask at 1.0822 fills at the best available price the moment the order reaches the broker — usually 1.0822, but in fast markets it may slip to 1.0823 or worse.
A buy limit order at 1.0820 fills only if EUR/USD reaches 1.0820 or below; it never fills above. A buy stop order at 1.0850 triggers when the ask reaches 1.0850 and then becomes a market order, with no guarantee of the fill price beyond that point.
Slippage and the gap between order and fill
On a market order in normal conditions, the fill matches the displayed price within tenths of a pip. During data releases or low-liquidity periods, the gap widens.
Worked example: a buy market order placed on EUR/USD at the moment of the US Non-Farm Payrolls release. Displayed ask at the moment of click: 1.0822. Fill price: 1.0828 — six pips of negative slippage on entry. On a 1 standard lot position, that is $60 of additional cost on top of the spread.
A buy limit at 1.0820 in the same market would not fill at 1.0828 — it has a price cap. In a fast upward market, the limit may not fill at all if EUR/USD never returns to 1.0820. The trade is missed, but not at an unfavourable price.
A buy stop at 1.0850 is the opposite: it accepts any fill price beyond 1.0850 once the trigger fires. In a fast market through 1.0850, the fill may be 1.0855, 1.0860, or further. The stop secures triggering, not pricing.
Stop-limit orders combine triggering and pricing: a buy stop-limit with stop at 1.0850 and limit at 1.0855 triggers at 1.0850 but only fills between 1.0850 and 1.0855. If price spikes past 1.0855 without filling, the order remains live until cancelled, possibly missing the move.
Related terms
Related articles
Common questions
What is slippage?
Slippage is the difference between the price displayed at the moment an order is placed and the price at which it actually fills. Slippage occurs when the market moves between order submission and execution, or when the displayed depth at the requested price is insufficient to fill the entire order. Slippage is asymmetric: market orders during volatility may fill at materially worse prices, while limit orders are never filled at worse prices than specified — they may simply not fill at all.
When is a buy stop order used instead of a buy limit?
A buy stop and a buy limit are different orders, not interchangeable. A buy limit at 1.0820 fills when EUR/USD reaches 1.0820 or below; it is used to enter a long position at a target price below the current market. A buy stop at 1.0850 triggers when EUR/USD reaches 1.0850 or above and then becomes a market order; it is used to enter a long position once the market breaks above a level. The same instrument and price level can be either a stop or a limit depending on whether the trader expects to enter on a pullback to support (limit) or a breakout above resistance (stop). The order type encodes the entry thesis.