🔔Order Types

Knowing how to place orders correctly is the foundation of effective trading. In this section, we will explore the different types of orders, how they differ, and when to use them.

🛡️ Stop-Loss Order

A stop-loss order is a pre-set price at which a trader limits potential losses on an open position. When the market moves against the trader’s position and hits the stop-loss level, the order triggers and automatically closes the position at the current market price. The main goal of a stop-loss order is to prevent further losses beyond the predetermined risk level.

📈 Example for a long position: Suppose a trader opens a long on Bitcoin (BTC) at $30,000 and sets a stop-loss at $28,500. If BTC price falls to $28,500 or below, the order triggers, limiting losses and closing the position.

💸 Take-Profit Order

A take-profit order is a request to close a position when the price hits a predetermined profit level. When the market moves in the desired direction and reaches the take-profit level, the order triggers and automatically closes the position at the market price. The main goal of a take-profit order is to lock in profits and exit the trade when the price hits the target.

📉 Example for a short position: Suppose a trader opens a short on Bitcoin (BTC) at $50,000 and sets a take-profit at $45,000. If BTC price falls to $45,000 or below, the order triggers, securing profit and closing the position.

🧐 How to Set Stop-Loss and Take-Profit Orders

Stop-loss and take-profit orders can be set in two ways:

• When opening a position: The trader can immediately set stop-loss and take-profit levels, ensuring risk management is in place from the start.

• Later, in the orders section: You can add or adjust stop-loss and take-profit orders after opening the position, allowing adaptation to changing market conditions.

🔔 Limit Order

A limit order is an instruction to buy or sell an asset at a specified price or better. Unlike a market order, which executes immediately at the current price, a limit order remains in the order book until the market reaches the specified level. This is useful if you want to buy cheaper or sell higher.

📈 For long positions: For example, you want to buy BTC at no more than $45,000. You place a limit order at that price. If the price falls to that level or below, the order executes.

📉 For short positions: You want to open a short when the price rises to $48,000, so you place a limit sell order. The trade will execute when the market reaches or surpasses that price.

🛡️ Stop-Limit Order

This order triggers when a certain condition is met. You set two prices: a stop price, at which the order activates, and a limit price, at which it should be executed. This allows for more precise control of market entry.

📈 For long positions: Set a stop at $48,200 and a limit at $48,000. Once the price rises to $48,200, the order is activated and will execute at the limit price or better.

📉 For short positions: Set a stop at $41,800 and a limit at $42,000. When the price drops to $41,800, the order activates and waits to execute at the limit price.

🛡️ Stop-Market Order

A stop-market order also triggers when the stop price is reached but, unlike the stop-limit order, it executes immediately at the current market price. This allows quick reaction to market moves, but with possible slippage.

📈 For long positions: Set a stop at $48,000 — when this level is reached, the order triggers and buys at market.

📉 For short positions: If you need to protect a position from further losses, set a stop at $42,000 — when reached, the asset is sold at market.

👁️ Trailing Stop Order

A trailing stop is a smart stop-loss that automatically follows the price at a set distance and moves up/down with favorable price action. If the price reverses, the order triggers and locks in profit or limits loss.

How it works:

1. You set a deviation from the current price (e.g., 2%).

2. The price moves in your favor — the stop-loss “trails” behind maintaining the set distance.

3. If the price reverses against you — the stop-loss holds its position.

4. Once the price moves back by the deviation (2%), the order triggers and closes the position.

Why trailing stops are important for prop trading: The market might surge near day’s end and then pull back the next day. A trailing stop helps protect profits and avoid account closure due to daily loss limits.

🧐 How to Set a Trailing Stop

1. Add a new order to an already open position.

2. Go to Orders > Create Order > Trailing Stop.

3. Set the trail amount — in dollars or percent — at which the stop-loss will follow the price.

4. Confirm the setup — the order activates and automatically tracks price movement.

🏄 Mastering order types is the key to confident and effective trading.