Understanding Market orders vs. Limit orders, buy and sell like a Pro

Ever wondered how to buy or sell crypto on Estoy Exchange? You've probably seen terms like "market order" and "limit order," and while they might sound intimidating, they're actually quite simple once you get the hang of them. Think of them as your two main tools for trading, each with its own strengths.

Market orders: Instant action!

Imagine you're at a shop and you see something you really want. You just grab it and pay the price on the tag, no questions asked. That's pretty much how a market order works in crypto.

When you place a market order, you're telling Estoy Exchange to execute your trade immediately at the best available price in the current market. This means if you want to buy, you'll get the lowest asking price available right then. If you want to sell, you'll get the highest bidding price available.

Why use a market order?

• Speed: They're perfect when you need to buy or sell quickly, perhaps because you see a rapid price movement and want to jump in (or out!) right away.

• Simplicity: No need to set a specific price; the exchange handles it for you.

When to be careful:

• Price slippage: In volatile markets or for larger orders, the price you actually get might be slightly different from what you saw moments before, as the market can move fast. This is called slippage.

Limit orders: Your price, Your control!

Now, imagine you're willing to buy that item, but only if it goes on sale for a specific price. You tell the shopkeeper, "I'll buy this when it hits $50." That's a limit order.

With a limit order, you set a specific price at which you want to buy or sell a cryptocurrency. Your order will only be executed if the market price reaches your specified limit price (or better).

• Buy limit order: You set a price below the current market price. Your order will only execute if the crypto's price drops to your set price or lower.

• Sell limit order: You set a price above the current market price. Your order will only execute if the crypto's price rises to your set price or higher.

Why use a limit order?

• Price control: You decide exactly how much you're willing to pay or receive. This helps you avoid overpaying or underselling.

• Strategy: You can set up trades in advance, allowing you to "set it and forget it" while you're away from your screen.

• Avoid slippage: Since you specify the price, you won't experience unexpected slippage.

When to be careful:

• No guarantee of execution: Your order might not fill if the market never reaches your specified limit price.

Quick comparison chart: Market vs Limit