When you start trading in the stock market, the first thing you must learn is how to place the right order. A lot of beginner traders lose money just because they don’t understand order types properly.
In trading, there are mainly three important order types:
👉 Market Order
👉 Limit Order
👉 Stop-Loss Order
Let’s understand each of them in very simple language.
Market Order
A Market Order means — You want to buy or sell a stock immediately at the current market price.
📌 Example:
Suppose the stock price of TCS is ₹4,500.
If you place a market order to buy 1 share, you will get it instantly near
₹4,500.
Best Usage:
✔ When you want to enter or exit quickly
✔ Useful for intraday and scalping
📌 Risk:
❌ You may get a slightly higher/lower price because price keeps changing.
Limit Order
A Limit Order means — You want to buy or sell a stock only at a specific price that you decide.
📌 Example:
TCS price is ₹4,500.
You want to buy at ₹4,480.
So you place a limit order = ₹4,480.
Your order will execute only when price reaches ₹4,480.
Best Usage:
✔ When you want to control your entry price
✔ Helps you avoid paying extra
📌 Risk:
❌ Order may not execute if price never touches your limit.
Stop-Loss Order
A Stop-Loss Order protects you from big losses. You decide a level where you will exit if the price goes against you.
📌 Example:
You bought TCS at ₹4,500.
You place a stop-loss at ₹4,450.
If price falls to ₹4,450 —
Your position automatically exits and prevents big loss.
Best Usage:
✔ Mandatory for risk management
✔ Saves capital from big losses
Never trade without Stop-Loss!
⭐ Difference in One Line:
✔ Market Order → Buy now at current price
✔ Limit Order → Buy at a price you decide
✔ Stop-Loss Order → Exit automatically to avoid big loss
Final Thoughts
Understanding order types helps you enter & exit trades smartly. Best traders always combine Limit Orders + Stop-Loss for safer trading.
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