Types of Stock Market Orders
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| Stock Market Topic 6 |
Welcome to Lesson 6 of your 30-Day Stock Market Learning Plan! In this lesson, you’ll understand one of the most practical and essential parts of trading — types of stock market orders. Every time you buy or sell a share, you are placing an order, and knowing which type to use can make a big difference in your profits and losses.
By the end of this lesson, you’ll clearly understand how to use Market Orders, Limit Orders, Stop Orders, and more — just like professional traders do.
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📑 Table of Contents
- 🔹 What Is an Order in Stock Market?
- 🔹 Market Order – Instant Buying or Selling
- 🔹 Limit Order – Control Your Price
- 🔹 Stop-Loss Order – Protect Yourself from Big Losses
- 🔹 Stop-Limit Order – A Smart Combination
- 🔹 GTT (Good Till Triggered) Orders
- 🔹 Comparison Table of Order Types
- 🔹 Common Mistakes New Traders Make
- 🔹 Pro Tips for Using Orders Wisely
- 🔹 Final Thoughts
📊 What Is an Order in Stock Market?
An order in the stock market is simply an instruction given to your broker to buy or sell a particular stock at a specific price or condition. Orders are placed through your trading platform or broker’s app such as Zerodha, Groww, Upstox, or Angel One.
Every time you tap “Buy” or “Sell”, you are choosing a type of order. The order type decides when and at what price your transaction will be executed.
💹 Market Order – Instant Buying or Selling
A Market Order means you want to buy or sell shares immediately at the best available price in the market. This is the fastest and simplest order type used by most beginners.
- ✅ Execution: Happens instantly.
- 💰 Price: Whatever is available at the moment (no control over exact rate).
- ⚡ Best For: High-volume stocks with plenty of buyers and sellers.
Example: You want to buy 10 shares of TCS. You place a market order. It gets executed immediately at the current market price — say ₹3,500 per share.
Note: Avoid market orders in low-volume stocks, as prices may suddenly spike due to low liquidity.
🎯 Limit Order – Control Your Price
A Limit Order allows you to buy or sell a stock at a specific price you decide. The order will only execute if the market reaches that price.
- 📌 Execution: Only when your desired price is available.
- 💸 Price Control: You decide the rate — great for disciplined investors.
- ⏳ Risk: Order might not execute if price never reaches your limit.
Example: You place a limit order to buy Reliance shares at ₹2,300. The market is currently at ₹2,320. The order stays pending until the price drops to ₹2,300 — then it executes automatically.
🛑 Stop-Loss Order – Protect Yourself from Big Losses
A Stop-Loss Order is designed to minimize losses when the market moves against you. You set a trigger price — if the stock hits that price, the system automatically sells (or buys) to limit your loss.
- 🚨 Purpose: To protect your capital by setting a loss limit.
- 💡 Execution: Triggers automatically once the stock reaches your stop price.
- 🧠 Best For: Traders who cannot watch the market all day.
Example: You bought Infosys at ₹1,600. You place a stop-loss order at ₹1,550. If the price falls to ₹1,550, the system automatically sells your shares, preventing further loss.
Without stop-loss, your loss could grow uncontrollably during sudden market crashes.
⚙️ Stop-Limit Order – A Smart Combination
A Stop-Limit Order is a combination of a stop and limit order. It allows you to set two prices — the stop price (trigger) and the limit price (execution boundary).
Example: You bought shares at ₹1,000. You set a stop price at ₹950 and limit price at ₹945. When the price hits ₹950, your order is triggered, but it will only execute if the price remains above ₹945. This gives you more control over trade execution.
🕒 GTT (Good Till Triggered) Orders
GTT Orders are long-duration conditional orders used by platforms like Zerodha and Groww. You can set a buy or sell condition that remains active for months until the trigger price is reached.
- ⏰ Valid for up to 1 year (depends on broker).
- 📊 Great for long-term investors who track specific price targets.
- 💼 Eliminates the need to check the market daily.
Example: You want to buy Infosys if it falls to ₹1,400. You create a GTT order. Even if it takes 3 months, your order executes when the price hits ₹1,400.
📋 Comparison Table of Order Types
| Order Type | Execution Time | Price Control | Best For |
|---|---|---|---|
| Market | Instant | None | Quick trades, high liquidity stocks |
| Limit | When target price hits | Full | Disciplined buyers/sellers |
| Stop-Loss | Triggered at set price | Medium | Loss prevention |
| Stop-Limit | Conditional | High | Advanced control |
| GTT | When triggered | Custom | Long-term investors |
⚠️ Common Mistakes New Traders Make
- Placing Market Orders during high volatility — can lead to unexpected prices.
- Not using Stop-Loss and losing big in sudden crashes.
- Forgetting to cancel old Limit Orders after price changes.
- Using the wrong trigger price (placing too close to current price).
- Relying only on emotions instead of strategy.
💡 Pro Tips for Using Orders Wisely
- Use Limit Orders for buying dips or selling rallies.
- Always set a Stop-Loss when trading short-term positions.
- Combine Stop-Limit with technical analysis for precise control.
- For long-term investing, prefer GTT orders to capture best entry points.
- Never chase prices — plan your order type before the trade.
✅ Final Thoughts
Understanding different order types is like learning the gear system of a car — it helps you drive safely in every market condition. Market Orders are for instant trades, Limit Orders for control, and Stop-Loss Orders for protection. Each has its place in your strategy.
Whether you’re a beginner or a growing investor, using the right order at the right time will help you trade smartly and manage risk efficiently.
Next Lesson (Lesson 7): “Understanding Candlestick Charts & Patterns.” This will teach you how to read market trends visually — a must-have skill for every trader!
Disclaimer: This content is for educational purposes only and is not financial advice. Always research or consult a certified advisor before investing.
📘 Keep Learning | Stay Tuned for Lesson 7 Tomorrow!
STOCK MARKET OTHER POSTS:
👉 What Is the Stock Market and How Does It Work? - Topic 1
👉 How to Open a Demat and Trading Account Step-by-Step - Topic 2
👉 Stock Market Basics - Understanding Market Indices and Their Importance for Beginners -Topic 03
👉 How to Read Stock Charts and Market Trends - TOPIC 04
👉 Stock Market Topic 5: Understanding Stock Market Indices
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