Binance offers different order types for you to use in Spot Trading. You can use them to set your trading strategies and trade efficiently. Let’s look at the common order types in Binance Spot Trading.
What is a market order?
A market order lets you instantly place buy or sell orders for an asset at the best current market price available.
You can select [Amount] or [Total] to place a buy or sell market order. For example, you can enter the amount directly if you want to buy a certain quantity of BTC. But if you want to buy BTC with a certain amount of funds, such as 10,000 USDT, you can use [Total] to place the buy order.
A limit order is an order that you place on the order book with a specific limit price. It will not be executed immediately like a market order. Instead, the limit order will only be executed if the market price reaches your limit price (or better). Therefore, you may use limit orders to buy at a lower price or sell at a higher price than the current market price.
For example, you place a buy limit order for 1 BTC at $60,000, and the current BTC price is 50,000. Your limit order will be filled immediately at $50,000, as it is a better price than the one you set ($60,000).
Similarly, if you place a sell limit order for 1 BTC at $40,000 and the current BTC price is $50,000. The order will be filled immediately at $50,000 because it is a better price than $40,000.
A stop-limit order has a stop price and a limit price. You can set the minimum amount of profit you’re happy to take or the maximum you’re willing to spend or lose on a trade. A limit order will be placed automatically when the trigger price is reached.
Stop-limit orders are good tools for limiting the losses that may incur in a trade. For example, BTC is trading at $40,000, and you set up a stop-limit order at a stop price of $39,500 and a limit price of $39,000. A limit order at $39,000 will be placed when the price drops from $40,000 to $39,500.
A One Cancels the Other (OCO) order combines a limit and stop-limit order. You place two orders simultaneously, but as soon as one is triggered, the other order is canceled. Therefore, only one of the orders can be executed.
For example, BTC is at $40,000. You can use an OCO order to buy 1 BTC when the price reaches $39,000 or sell it when the price rises to $41,000. One of the orders will be executed first, meaning the second one is automatically canceled.
A trailing stop order lets you place a pre-set order at a specific percentage away from the market price. It is especially useful when the market swings, which can help you limit the loss and protect gains when a trade does not move in a favorable direction.
Please note that the trailing stop order does not move back in the other direction. When the price moves in the opposite direction by a specified percentage, it will close or exit the trade at market price.