FRM: Order Types (market, limit, stop, stop-limit)

Market order: guaranteed fill, but not price. Limit order: guaranteed "or better" price, but not fill. Stop: After price trigger reached, becomes market. Stop-limit: After price trigger, becomes limit order. For more financial risk management videos visit our website at www.bionicturtl...!

[@nikk4129]

I'll probably have to watch this video 50million times to try to fully understand the logic of all this, but it's still the best video I've seen yet. Thank you!!!!

[@bionicturtle]

Hi Nikkie, LOL, thank you, I recorded it, and I still have to refer to it occasionally because I haven't mastered it. Actually, this weekend I put in my first ever limit order (heretofore I had only used market orders) so i I have yet myself to have found a need to execute a stop (much less a stop-limit) but I'm a conservative investor not a trader so ...

[@nikk4129]

Bionic Turtle and I'm pretty new to the market so I'm just searching for much as I can, specifically this topic. This was so easy for me to understand and trust me I've been searching lol

[@DeniseGlass]

I'm in the same boat. 😄 Already watched it twice.

[@lando8398]

They try to make it hard. Many words can be changed to simpler vocabulary. I think it's because they didn't want the public to understand the inner workings of trading.

[@boorayin2773]

Agree - have watched quite a number to try to get my head around it and this one helped a lot. Good video, thanks!

[@IThinkICare]

It is still confusing for two reasons. One, it assumes that the price rises on the buy. So people say, why would I buy higher. To show this, the buying need to be shown below the market price. So the buy limit $28. So as the price drops, it reaches $28, the buying executed. The other problem is that while in most places you are saying it right, the order sent to the market, I think in the first part you say the order will be filled above that price. Unfortunately it will only be filled if someone is willing to buy it or in the case of a buy, if someone is selling it. The market price is the last price but it does not guarantee that it will not turn around as the next buying is not willing to pay that price. I don't know if all this can be shown on one graph. TD also calls the Stop order, Stop-market order. :)

[@VeritasEtAequitas]

He should have out the sells on the top of the line and buys on the bottom ;)

[@loloreveur]

Simple video to understand. Thanks

[@JosephBirkas]

Because it is incorrect in this video. It does not work this. In case of buy stop limit order the stop limit level triggers the order and the price will be lower to buy cheaper than the trigger level in a down-tick. The short version is also vice-versa.

[@fkarline6557]

This is the best explanation of market, limit, stop and stop-limit that I have seen so far. Thanks a million.

[@bionicturtle]

+FKeith Arline You're welcome! We are glad it was helpful!

[@mrcuboid]

I finally get Limits and Stops!! I've watched so many vids and never got a real understanding of the distinction between limits and stops. Now I do. Your illustrations really helped. Thanks so much!

[@Celeb-w7j]

I am a beginner and a lot of time I only use market order to buy stocks. Ihave tried to learn the different among limit, stop, and stop limit. Your explanation is more understanding than others. Now I feel more confident to use these orders.

[@iancourter7291]

Yep. Definitely the clearest explanation I've seen thus far on this. The ambiguity that other videos left on the distinction between a stop and a limit is rather maddening in retrospect. You've got a new subscriber. Thanks for the time that you put into this!

[@vegard5935]

Trading is very profitable if done the right way!

[@devinw.3211]

You are right!

[@kevinbrocklesby74]

Vegard, if course, what kind setup do you use in trading ?

[@vegard5935]

I don’t trade myself due to how busy I am. I trade with the help of a trade expert, Mr Wilson McEntee. He handles all my trades on my behalf generating high profits for a commission.

[@jamescomm2647]

I have been hearing good stuffs about Mr Wilson, how does his trading service work and how can I communicate to him from here in London. Thanks mate.

[@vegard5935]

James Comm, Mr Wilson is my trade manager. With well over 2 months now I have made millions through him. All I do is track the performance of the trade he handles all the trading process because his strategy in trading is just so profitable and amazing. Mr Wilson is just so professional in this that’s why I let him manage my trades.

[@jerryaccuardi4396]

This is the best explanation of order types that I’ve seen. I have watched more than 10 KZbin videos on this topic and it still was not clear. This was so straight forward, the words, the great graphics and this great instructor made it all clear. I subscribed !!

[@miketmcquinn]

Exactly what I came to say!

[@MrFloydReeves]

by far the easiest and best explanation on how to buy and sell stocks thay I've seen on the net.

[@ryancatania2658]

This was the clearest example i’ve seen of market orders thank you very much. The only thing left that i’m having trouble understanding is trailing stops

[@Thurgor_Supreme]

This is the first set of trader videos I've stumbled across that's actually helpful with explaining things. From a newbie with the capital to justify this lifestyle, thank you so much.

[@DeniseGlass]

How has your trading gone? I am a newbie now 😄

[@decadyne]

Probably the clearest explanation I could find for these concepts. Thanks.

[@Victor-cz4et]

Best explanation so far and beautifully done too, I keep coming back to it, over and over again

[@bionicturtle]

Thank for such a kind comment

[@freaky108]

OK I think I finally got it. My issue was between limit and stop-limit. Limit's limitation is that the market might not reach or (and more importantly to understand the difference:) can move on super quickly and might not get fulfilled IF the price moved in the wrong direction from THE DESIRED PRICE (simplifying this analogy so it doesn't matter buy or sell side). You had no contingency price in case it moved in the wrong direction. Stop-limit allows you have that contingency price; to build in $35-$37 as a 'buffer', but $35 as the first trigger. The STOP is the signal that your desired price is reached: like a limit order. But you also put in a JUST IN CASE price (almost like a second limit) that is intentionally WORSE than the stop. This is a better guarantee to get it fulfilled than JUST a limit order because if the market moves super quickly in the wrong direction you had a backup worse price.

[@davidjames1684]

Confusing names for some of these. For example, a stop market sale could be called a trigger market sale instead, since the specified price will trigger a market sale. The term "stop" is confusing because what actually is stopping? Normally stop means for something to cease, not move, discontinue what it was previously doing... so this is not a good use of the word. The only thing we might be "stopping" is retaining that stock but trigger market sale is (in my opinion), a much better term. In fact since we are not really stopping anything, this could be called a conditional start market sale, since we would be initiating a market sale at some set price. Many others could have been named better too to help alleviate confusion.

[@jannetramirez2756]

This is the bestest explanation I’ve ever seen, so far.

[@bionicturtle]

Thank you! We are happy to hear that our video was so helpful!

[@CarnaticCorner]

Watched a lot of videos, Best explanation till date. Staright to the point and clear

[@sunil270]

awesome, best crisp way of presentation. one picture and less words of explanation needed.

[@TM02]

Why would you wait until the price is higher to buy? That makes absolutely no sense. You keep saying “better”, but buying at $35 is not “better” than buying at $30.

[@jubith85]

There is an information overload one searches over these topics online. But the key understanding of these concepts are clear when one can really differentiate and compare between each entity. Your explanation about the uncertainty of price with certain orders and how you lock with limit is the best Ive seen so far. The pictorial diagram really helped. Thanks

[@sungyentsai4442]

Wow, Thank-you so much for this video. I've always been confused about buy-limit stop limit...

[@mrcuboid]

it depends on the general direction prices are moving in.... if prices are rising when you buy then you want to set a limit above the current market price to "limit" the amount you pay - kinda like a ceiling.

[@3702251a]

Best Explanation I have seen so far! Thank you.

[@tricksoftrade9722]

Probably the best explanation I’ve found on KZbin

[@BeyondTheScrubsJourney]

ugg after countless search this is the so far the best explanation! thank u

[@wewung2]

Still the best and clearest explanation after all these year. Thank you.

[@davidfischer196]

Beautifully explained. The best I've seen. Thank you.

[@32kirby32]

Perfect explanation. This should be included to all new brokerage accounts

[@bluepine33]

Certainly a well organized presentation - especially with the visual graphic. Additionally, organizing the presentation into distinct Buy and Sell sides makes everything clear whereas other videos do not do this and thus confusing as to application.

[@0UntamedBeast0]

Wait, if it's at $30, why would you want to buy at $35 and sell at $25?

[@IThinkICare]

He is talking about a situation when the price rises. Some people buy when the price rises. We like to buy when it falls but it can't be shown on one graph.

[@JoshAdamsFTIM]

I'm assuming these are exaggerated example figures to illustrate his point

[@vladimirrurik4579]

Never assume! We want to limit losses. Buy at $30. Stop, or don't buy when price reaches $31. Sell to stop losses (if price goes below $30) at $29. This says we're only comfortable losing $1 below purchase price. Or, sell when price reaches our desired gain of $33 per share. Recap: Scenario #1 has us selling to stop losses at $29. Scenario #2 has us selling when our desired gain is reached. These mechanisms are vital for the health of your wealth. Not using them risks losses far beyond what was outlined in above video. Stocks do reverse directions without notice. I don't know of many people who can absorb a $5 to $10 loss per share and still be happy. Protect your investment by knowing how to input these safeguards on every stock position.

[@samsturmer1659]

Yeah, I thought you buy low and sell high not buy high and sell low?

[@broxxad]

@@samsturmer1659 it's shown this way because he's trying to fit all the possible scenarios in one page.

[@nitroboy246]

For the stop-limit @ $35 / $37 example, you said that after the price reaches $35, the limit order of $37 is triggered and your order will be filled at a price $37 or better (e.g. 36.90 like you've said in the video). Why wouldn't your order get filled at $35 after the trigger when $35 is better than $37 and $36.90? Would appreciate it if you can clarify this concept for me!

[@hollygolightly8048]

Great question and I wish someone would answer.

[@pappu2405]

Very clear and perfect way you explained this. Graphical [presentation makes things much easier. Thanks

[@dwightmendenhall7545]

Hey David thanks for the illustration. This has been the best video yet. Maybe it's starting to click because I've watch so many other videos on the same concept but none of them have shown visually all the type and there uses. The only thing your missing is a trailing stop but it was better not to have added it because this videos fantastically described the basics. Thanks

[@hollywd125]

The best explanation I have seen thus far stop limit vs stop loss.

[@bionicturtle]

Thank you for watching! We are very happy to see that our video was so helpful! If you would like to be informed of our newest videos and other risk articles, sign up for our newsletter here: www.bionicturtle.com/blog/.

[@bionicturtle]

@wcoy79 glad you liked it, thanks for your comment! David

[@user-jt1jv8vl9r]

I understand everything apart from Stop orders. So market and limit orders are simple. I have missed out on buying trades by fractions of 1% where had I set a stop order I would have got it. I believe I could have set a buy of 5000 say, (I missed out on a trade that dropped to 5001 before going back up!), but to have a higher buy level of 5100 in case the lower level was not reached. Once the price drops below the 5100 level I assume that the 5100 level then becomes active as the fall back buy option and in this example the buy would have executed at 5100!? Also, I need to protect myself from bad investments and set up stop orders to limit losses.

[@freelancescenter]

One of the best video explaining this subject

[@hahaharchitect]

Great explanation HOWEVER: It is assuming one wants to buy above the current price, and sell under the current price. What about the opposite scenario?

[@Dayta]

this is by far the best video explaining those order types

[@eduardoreategui]

Best video I've seen to explain this- thank you

[@matthewmatthewson7436]

Best explanation I've seen on this. 10 year old video, too.

[@jasonbroadway8027]

This is the first stop limit video that I grasped. Well done!

[@bionicturtle]

Thank you for watching! We are very happy to hear that our video was so helpful!

[@gustavorueda7404]

Wow! Great graphical explanation 👍👍👍I read and watched these order types elsewhere, but this vid finally helped me grasp the definition.

[@ZSG16]

Hello, first of all, great video! I am new to investing and am a little confused. Why would you want to place a limit order above the market price? I always thought limit orders were the least that you are willing to pay per share?? Not more than what the market price is. Sorry if this is a dumb question, I'm just confused haha

[@syga2510]

wonderfull, even after 10 years this educational video is absolutely usefull, thank you

[@aeowid]

This is the most concise and best explanation I have found. Thank you!

[@thedancer911]

Hi David, great video. Please clarify these 2 things for me: 1 - does the STOP in a STOP-LIMIT , always act as JUST the trigger for the limit ? and 2: what happens to the STOP in a STOP-LIMIT if the LIMIT is not reached at all? ex: i buy stock @ 10 thinking it will go to 100. i set a STOP-LIMIT sell order for stop@ 80 and limit @ 100. If the price never reaches 80, nothing happens; if it reaches 99 but then drops, will it be sold as a market order @ 80, or once it reached 80 it became a limit order but since the price never reached the limit , nothing happens, my order is not filled at all ?? To protect my profit in this case, is only a trailing-stop the solution?

[@alanahmmed2654]

thanks you so much i have watched more than 5 videos i didnt undrstand but your explaination was clear i undrstood now

[@Grimreaper420ful]

Best explanation I’ve seen yet

[@carterjwillow3079]

Investing with the right system tends to stop profit loss and maximize profit outcome. I continue earning investing on the trade market

[@philipjerome4227]

How can I maximize my profit? How do you do it ma’am?

[@carterjwillow3079]

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[@daviegelo2481]

If we talking about Alex sage. He’s truly genuine and professional. I’ve been trading for a couple of years but I must admit ever since crossing with sir Alex, my profit outcome has really increased massively

[@vinesharjun1091]

I realize to make profit on the trade market. Professional assistance is necessary. Working with this man I’m earning as well as learning

[@sr29188]

Amazing explanation and breakdown! Best video on the subject on KZbin. Thank you.

[@bionicturtle]

Thank you for watching! We appreciate your kind words! :)

[@trueniggazblood]

Usually you buy around asking price or generally higher than market price because you want to catch the stock on the upside,even if the stock has been going down you want to buy the moment it goes back up as oppose to getting it when its going lower because it could just be nosediving down for a while

[@SGS2sprint]

Finally understood this lesson. Your visual graphic helped me a ton. Thank you

[@willpu]

best esplenation ive seen . right to the point . loved it !!!

[@bionicturtle]

Thank you for watching!

[@jcmisshome]

Your Chart Beats all the other explanations. Direct and Clear! and is there a way to get that full chart in one frame?

[@chazmuska]

Why would you put a limit order to buy at $35 when the current price is at $30? Everything is backwards. You'd want to buy low and sell high....should be switched sides

[@chazmuska]

***** Yes, you are right about that! Some people like to put stops after a confirmed breakout.

[@anthonygonzalez9422]

It can be used if you're expecting sudden upward volatility from a low position.

[@shivinm]

sounds correct to me, the limit is 35 to protect against a sudden surge in price beyond 35 when buying the stock at 30.

[@cahanfowler1136]

Sometimes you are waiting for confirmation before purchasing long.

[@rbmjr1us]

Another reason is if a stock you want to buy is falling in price. But you don't want to try and predict what the stocks final bottom will be. You can put a limit order to buy above the current price. As the price falls you lower your limit order to buy with the stocks falling price. When the stock finally bottoms and starts a new uptrend it will pick up your "above the market" limit order to buy on the way up.

[@malthus101]

Think I may have worked it out - if going long, and say the the limit was 37, the price could shoot past it and the order would not be filled. But if a stop triggered it at 35, you would have a chance of getting filled any point between 35 and 37, i.e. far more chance of getting filled. Correct?

[@s8RRRR]

But still enormously informative. I don't care for words as long as they make a topic more conceiveable - and if the easiest way to say it makes it the easiest to understand - who splits hairs.

[@VeritasEtAequitas]

Seems like it would make more sense if you showed the sell orders above the $30 and buy below as that's where people would want to trade.

[@alexandrumalai421]

Bravo! Crystal clear explanation ever!

[@bionicturtle]

Thank you for watching!

[@wanecho8035]

Very clear! Thank you! The clearest explanation so far!

[@yejin5315]

Very clear!!!! Your chart is so clear ! Thanks alot

[@farquoi]

that graphic makes it all clear

[@bionicturtle]

Thank you for watching! We are happy to hear that our video was so helpful!

[@MrAloha312]

bionicturtle, I just wanted to says thanks for covering all these finance topics that are tough to find educational videos on!

[@ZionismIsRacism]

This is a great video, but it is very confusing. Aside from the graphics being confusing, if a stock was trading at $30 why would someone going long put in a limit order for $35? It would make sense for them to put in a limit order for $25 and enter the market if the stock price drops but why would anyone want to guarantee a $35 price for a stock trading at $30? Edit: Looks like your analysis assumes the long is buying as the price climbs higher. I suppose it would make sense that way.

[@FN-1401]

bidding to buy at higher price is used in breakout strategies, becz once a certain resistance is broken then a probable sharp rise in price is expected. ( I am still a beginner, someone correct me if I am wrong)

[@ryanto7552]

Simple and easy to understand, thanks.

[@manoftheforest]

I'm still confused... How does stop limit work if you want to sell at a price higher than current price? If I buy at 30, current price is 35 I can make a limit sell at 40 and hope it gets there....but can I set an order to sell at 32 if it doesn't quite reach 40 and starts to drop?

[@FinleyFuns]

Why does some give this a thumbs down? Please explain the reasoning so I can understand

[@GetMoneyCorporateA]

Very clear explaination.

[@Sandarpan]

This is the best video on this topic

[@aravindsn]

Thanks a lot. Tried everywhere but this one expalins the best and Clear!

[@beishanluo7808]

This is order only for per market, I try understand for a few times, thanks for sharing.

[@wcoy79]

very informative. Good breakdown of information with an even better delivery. I also enjoyed the grafics and visual aids. Good Job!!

[@nsmith968]

best explanation yet...thanks

[@chewls1133]

I still can't decide which order type is overall the best route to take. Im 100% new to buying and selling stocks.

[@thevinceberry]

I use limit order on buying and selling. It is safer, sometimes a stock fluctuating too much for market order

[@Faisdragon]

Nice....cleared some confusion...still need to apply and not fully absorbed

[@grantmagner6117]

On the buy side if you put your stop-limit order with the stop @ $35 and limit @ $37.... when the market hits $35 and your limit to buy @ $37 or less goes in.. are you now more likely to get filled at the higher price of $37 while the market currently trades at $35 ?? If you assume the market price hangs around at $35 (but obviously there are still sellers in the level 2 above the current the lowest asking price of $35 that want to sell their shares at higher prices like $37) am I more likely to get paired with these higher priced sellers since my limit order is @ $37 or would I automatically be paired with the current best asking price at the time? I just want to make sure I understand all of the angles. Thanks to anyone who can answer this question

[@NoriegaRicky06]

I still dont't understand the difference between the limit and stop order? It seems they are both the same thing. Say the market price is $30 and we put in a stop order of $37, does that mean that once the stock reaches $37 that we will purchase the stock higher than $37? I understand that it becomes a market order at once it reaches but does that mean we can possibly purchase at $36.90, $36.92, etc, or will be higher than $37 since it is a stop order??

[@malthus101]

This is good but it still leaves me wondering why anyone uses a stop limit - in your example of going long, instead of a stop limit triggered at 35 for 37, why not just use a limit order set for 37? Thanks.

[@SuperJohnfoster]

Very easy to understand. Good job

[@jferrari9300]

Excellent video! Very clear and easy to understand. Thanks

[@bionicturtle]

Thank you for watching!

[@MatthewMcFarlands]

Best explanation vid ever, thank you so much

[@richardcabello5028]

Why would u want the limit order for $35 when the stock is $30? Wouldn’t you want the limit order for less then $30? Why would you wanna wait in hopes that the stock price rises to pay $5 more a share? Confused? The limit order should be what the price of the stock is or at least a little bit less shouldn’t it be?

[@66ElCamino357]

Great tutorial, best I've seen....

[@harrympunjab6818]

ossum vedio ,made my confusions clear today

[@Onraitravels]

if the Market order is for $30 I place limit orders below the $30 market order. That assumes that the market will fluctuate throughout the day and I may be able to buy for less the the $30 market. In other words I may place a limit at $29.75 and it will fill if the market dips to that level. I fail to see the purpose of place a limit, stop-limit at a price greater than the market price. Why not just buy at the $30? You pay more if you place a limit at $35.

[@1sisodia]

hello, In case of buy , why would someone put a limit > market price ? if market price is lower then investor will buy on ongoing market price itself

[@ramslaw]

Excellent video - very well explained, thank you

[@mishaluna163]

- limit order 35 = buy at 35 or better - stop-limit order 35/37 = buy at 37 or better what's the difference? what is the additional "stop" part doing in the second case? if the aim for both is to buy at a specific price or better?

[@sfoot3882]

Misha Luna limit order at 35. Puts in a market order when the price reaches 35. So activates at 35, then fills at best price. Stop limit order 35/37 activates at 35 dollars and will be filled if it can be filled at 37 or lower. In both cases 35 is the trigger, the difference is the a new market order or a limit order at 37.

[@ancientfutures]

Stop-limit order. Triggered @25. Does price have to go to 23? Then placed limit order? then Can sell higher? I don’t understand how it can sell higher if you put in 23 price? Oh wait I think I get it now... wouldn’t a limit order placed above if buying be similar to market order. And a limit order to sell below price also act as if a market order? Where am I wrong here?

[@trancelifting6809]

What happens if the current price of a stock is $10 and you place a buy-limit order for $11, and then the stock hits $11?

[@zamogilny95]

Best explanation out there! Thanks a lot

[@timholt72]

This explanation is simply fantastic!!! Thank you.

[@bionicturtle]

Glad you like it. Frankly, I'm eager to try an update (this was eight years ago), I think I've received some great feedback for improvements (also, I have more experience as an investor now, so i have a bit more context on the purpose of some of these orders). Thanks again

[@guitarpassion1]

Thanks for the information, I am confused, in your example if I am placing an order to BUY wouldn't it be the lower the better for the price to go down, why would I place a stop. How does stop-limit differ from just limit. Thank you again

[@spaghappy]

This is all back to from though....dont you want to get it set up to sell at above the market price? Especislly with cryptio where the markets volitile by %15 each way per day?

[@kevinagee4364]

what determines if you get filled? if you don't, do you just try again?

[@PriyankJain79]

Thank you. This is very well illustrated.

[@85bezzer]

Excellent as usual. I watch all your videos your heuristics are unparallelled... If I may humbly offer a suggestion. It would really stick if you could give a quick example of why an investor would want a limit order, stop limit, etc. Your stuff is great if I am ever going to take a CFA or FRM im buying it hands down!

[@cek3800]

Well explained. You did a great job!

[@cahanfowler1136]

Great explanation and diagram !!! Thanks!