# Order Types Knowing how to place orders correctly is the foundation of effective trading. In this section, we'll cover the different order types, how they differ, and when to use each one. ## 🛡️ Stop Loss Order A **Stop Loss order** is a pre-set price level at which a trader limits potential losses on an open position. When the market moves against the trader's position and reaches the stop loss level, the order triggers and automatically closes the position at the current market price. The main purpose of a stop loss order is to prevent further losses beyond a pre-defined risk level. 📈 **Long position example:**\ Suppose a trader opens a long position on Bitcoin (BTC) at $30,000 and sets a stop loss at $28,500. If the BTC price drops to $28,500 or below, the order triggers, limiting losses and closing the position. {% hint style="warning" %} **RWA Markets (Forex & Commodity):** Stop Loss orders on RWA markets are executed as market orders, filled at the first available price after the trigger level is reached. If a position is carried through a market pause and the opening price is worse than your stop level, the order will be filled at the first available market price. Be aware of potential slippage. {% endhint %} ## 💸 Take Profit Order A **Take Profit order** is an instruction to close a position when the price reaches a pre-defined profit level. When the market moves in the desired direction and hits the take profit level, the order triggers and automatically closes the position at the market price. The main purpose of a take profit order is to lock in profits and exit the trade once the price has reached the target level. 📉 **Short position example:**\ Suppose a trader opens a short position on Bitcoin (BTC) at $50,000 and sets a take profit at $45,000. If the BTC price drops to $45,000 or below, the order triggers, locking in profits 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:** A trader can set stop loss and take profit levels at the time of entry, ensuring risk management is configured from the start. * **Later, in the orders section:** Stop loss and take profit can be added or modified after the position is opened, allowing the strategy to be adjusted based on market conditions. ## 🔔 Limit Order A limit order is a request to buy or sell an asset at a predefined trigger price. Unlike a market order, which executes immediately at the current price, a limit order waits until the market reaches the specified level. Once the price hits the trigger, the order is guaranteed to execute — at the trigger price adjusted for the current spread. This is useful when you want to open a position once the price reaches a specific level. 📈 **For long positions:** For example, you want to buy BTC at $45,000. You place a limit order at that price. When the market reaches $45,000, the order will execute guaranteed — at the trigger price adjusted for the spread. 📉 **For short positions:** You want to open a short position at $48,000 — you place a limit sell order. When the market reaches that level, the trade will execute guaranteed — at the trigger price adjusted for the spread. ## 🛡️ Stop Limit Order This order triggers when a specific condition is met. You set two prices: a **stop price**, which activates the order, and a **limit price**, at which it should be filled. This approach provides more precise control over market entry. 📈 **For long positions:**\ You set a stop at $48,200 and a limit at $48,000. Once the price rises to $48,200, the order becomes active and will be filled at the limit price or better. 📉 **For short positions:**\ You set a stop at $41,800 and a limit at $42,000. When the price drops to $41,800, the order activates and awaits execution at the limit price. ## 🛡️ Stop Market Order A stop market order triggers when the trigger price is reached, then executes at the current market price (including the spread). This allows you to open a position when the price moves in the desired direction. In some cases, the execution price may differ from the trigger price — this is called slippage. By default, the maximum allowable slippage for this order type is 3%. 📈 **Opening a long position (example):**\ Suppose the current XRP price is $2.00. You expect that if the $2.10 level is broken, the price will continue to rise, and you want to go long on confirmation of the move. You place a Long Stop Market order with a trigger price of $2.10. Next: the first price received from the oracle above the trigger is $2.105. The spread for your position size is 0.01%. As a result, the position opening price will be calculated as the market price plus the spread and will be $2.1052. 📉 **Opening a short position (similarly):**\ If you expect that a break below a certain level will lead to further decline, you place a Short Stop Market order with the desired trigger price. The order will trigger when the price reaches the trigger level, and the position will open at the first available market price (including the spread). > **Important:**\ > When the market reopens after a pause, the price may change sharply (gap). The order will be filled at the first available market price received after the market pause ends. If you set Stop Loss and Take Profit for a Stop Market order in advance, keep in mind that the position opening price after a gap may differ significantly from the trigger price. The resulting PnL for SL/TP will be calculated from the actual position opening price. Additionally, if the difference between the trigger price and the available market price exceeds the maximum allowable value, the order will not be executed. ## 👁️ Trailing Stop Order A **Trailing Stop** is an intelligent stop loss that automatically follows the price at a set distance and tightens as the market moves favorably. If the price reverses against the position, the order triggers and locks in profits or limits losses. **How it works:** 1. You set a deviation from the current price (e.g., 2%). 2. The price moves in the desired direction — the stop loss "trails" behind the price, maintaining the set distance. 3. The price reverses against you — the stop loss stays in place. 4. Once the price pulls back by the set 2% — the order triggers and the position is closed automatically. **Why is the trailing stop important for prop trading?**\ The market can surge sharply toward the end of the day and then pull back. A trailing stop helps preserve profits and avoid account closure due to daily loss limits. {% hint style="warning" %} **RWA Markets (Forex & Commodity):** Trailing Stop orders on RWA markets are executed as market orders, filled at the first available price after the trigger level is reached. If a position is carried through a market pause and the opening price is worse than your stop level, the order will be filled at the first available market price. Be aware of potential slippage. {% endhint %} ### **🧐 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 distance — in dollars or percentage — at which the stop loss will follow the price. 4. Confirm the setup — the order is active and will automatically track price movement.