One of the easiest things to misunderstand about limit orders is thinking, “Once I place one, it’ll eventually fill.” It only executes at your specified price or a better one. For example, if you place a buy order for $BTC at 60,000 while the current price stays at 62,000, the order just sits there—the market can move on without it ever filling. If you want to get the coin right away, a limit order may not do the trick.
A market order works the other way: you don’t specify a price, and it takes the best available prices on the market. A fast execution is pretty much guaranteed, but the final execution price may differ from what you saw in the order book at the time. That’s where slippage comes from: with a coin that has a thin order book, a single order can sweep through several price levels, causing the average price to differ significantly.
So the point isn’t to compare which type is “better”—first ask yourself whether price or speed matters more for this order. If you want to control costs and don’t need an immediate fill, use a limit order; if you want to enter or exit right away and are willing to accept price fluctuations, use a market order. Slippage is usually low for assets like $BTC that have good order-book depth, but before using a market order on a small coin with a thin order book, it’s worth checking the buy and sell orders first.
A market order works the other way: you don’t specify a price, and it takes the best available prices on the market. A fast execution is pretty much guaranteed, but the final execution price may differ from what you saw in the order book at the time. That’s where slippage comes from: with a coin that has a thin order book, a single order can sweep through several price levels, causing the average price to differ significantly.
So the point isn’t to compare which type is “better”—first ask yourself whether price or speed matters more for this order. If you want to control costs and don’t need an immediate fill, use a limit order; if you want to enter or exit right away and are willing to accept price fluctuations, use a market order. Slippage is usually low for assets like $BTC that have good order-book depth, but before using a market order on a small coin with a thin order book, it’s worth checking the buy and sell orders first.