Market, Limit and Stop Orders: What Is the Difference? Do You Want the Fill, or the Price?
The first time you open the order window, besides “Buy” and “Sell” there is a row of options that are hard to make sense of: Buy Limit, Sell Limit, Buy Stop, Sell Stop.
If you want to wait for the price to dip a little before buying, which one do you pick? If you want to wait for a breakout before chasing, which one is that? Pick one at random and the result is often this: the order sits there all day without moving, or it fills at a price you did not expect.
The difference is not buy or sell. It is what you want: the fill, the price, or “move only once it is touched”.
This is part eight of MASQuant’s “Trading Academy · Beginner Essentials” series. The first seven parts covered contract specifications, lot size, leverage, stop losses, the spread, overnight swaps, and the margin call and forced liquidation that happen when your margin runs short. This one goes back to the last step before you click submit: which type of order you send.
The short answer
A market order guarantees the fill, not the price. A limit order guarantees the price, not the fill. A stop order waits until the price is touched before it is sent, and once sent it fills at market.
Work out which one this order needs first, then decide which type to use.
Market order: you want it now, at the current price
A market order does not specify a price. It fills immediately at whatever price the market can fill right now. As part five, “What Is the Spread?”, explained: a buy fills at the ask; a sell fills at the bid.
It guarantees the fill (provided the market is open, there is a quote and you have enough margin), but it does not guarantee the price: there is a small delay between sending and filling, and the quote may already have changed. When the fill price differs from the price you saw, that is called slippage. Normally the difference is small; when the market is moving fast (for example around a major data release) or liquidity is thin (quiet trading, little volume quoted nearby), it can get larger, and it can go either way.
Limit order: name a better price and wait for it to come
A limit order names a price that is more favourable than the current price and waits for the price to come to it: a buy is placed below the current price (Buy Limit), a sell is placed above it (Sell Limit).
It is the exact opposite of a market order: it guarantees the price — the fill will only be at the price you named or better; it does not guarantee the fill — if the price never gets there, it does not fill, even if it misses by a hair. In some markets, even when the price touches your level, the fill also depends on the order queue and the volume ahead of you.
Stop order: once the price is touched, it is sent at market
A stop order sets a trigger price. It is sent only once the price touches that level, and once sent it becomes a market order that fills at the price at that moment. It goes on the opposite side to a limit order: a buy is placed above the current price (Buy Stop), a sell is placed below it (Sell Stop).
It has “stop” in its name, but stopping a loss is only one of its uses:
- Exiting with a stop loss: after buying, sell once the price falls to a certain level. The stop loss from part four, “How to Set a Stop Loss?”, is entered in MT5 in the order’s stop loss field (S/L), and it works the same way.
- Entering on a breakout: buy only once the price breaks above a level, or sell only once it breaks below — the price has to cross that line first, then you act.
Because it fills at market once triggered, what a stop order guarantees is “sent once touched”, not the fill price — which is why part four said a stop loss is not guaranteed to fill at the level you set (numbers for illustration only, not real market data):
A long position has its stop at 95; Friday closes at 97
Monday opens straight at 92 (the prices in between never traded: this is a gap)
→ Triggered at the open, exit at about 92, not 95Order software for stocks and futures also distinguishes between market and limit orders; the “sent once touched” type is called a stop order by some, and a trigger order or conditional order by others, and the details vary. Learn the mechanism, not the name.
One table to sum it up
| Market order | Limit order | Stop order | |
|---|---|---|---|
| What it guarantees | The fill | The price (or better) | Sent once the price is touched |
| What it does not guarantee | The price (slippage possible) | The fill | The fill price (fills at market once triggered; slippage possible) |
| Which side of the current price | No need to place it; fills immediately | Buy below, sell above | Buy above, sell below |
| When it suits you | You must be filled now | You want a better price and can accept not being filled | You only act once the price has crossed a line first (breakout or breakdown) |
An easy way to remember which side: a limit order goes on the side that is “a better deal for you”; a stop order goes on the side “the price has to travel through first”.
An easy example
(These numbers are for illustration only, not real market data; ignore the gap between the ask and the bid for now)
Say the current price is 100:
Want to buy right now → market order
Want to buy once it falls to 98 → Buy Limit 98 (buy limit order, placed below)
Want to chase once it breaks above 102 → Buy Stop 102 (buy stop order, placed above)
Want to sell once it rises to 102 → Sell Limit 102 (sell limit order, placed above)
Want to sell once it breaks below 98 → Sell Stop 98 (sell stop order, placed below)“Buy once it falls to 98” is 2 cheaper than now; “chase once it breaks 102” is 2 more expensive than now. Using a stop order to chase a breakout means paying a bit more of the price in exchange for confirmation that “it really did break out” — the cost is that it may fall back after breaking out. Using a limit order to buy cheaper on a pullback costs you the chance that the price never comes back. It is a trade-off, not right versus wrong.
Common mistakes
1. Wanting a breakout, but placing a limit order
You want to buy only once the price breaks above 102, but you place a Buy Limit at 102 — which means “I am willing to buy at 102 or cheaper”, and the current price of 100 already qualifies. Some platforms will fill it immediately, so you buy at 100 before any breakout has happened; MT5 will not accept it, because a buy limit order must be below the current price. The reverse is the same mistake: wanting to pick it up cheap at 98 but placing a Buy Stop at 98. Before you place it, check which side of the current price the order is on.
2. Thinking a limit order will always fill
If the price misses by a hair, the order just keeps sitting there. In MT5 there is one more thing to watch: the candles for most forex and CFD instruments are drawn with the bid, but buy pending orders are triggered by the ask — the chart may look as if it touched your Buy Limit while the ask is still one spread away. The same applies if you use a limit order to exit: if the price does not come, you do not get out.
3. Thinking a stop order always fills at the level you set
Once triggered it is a market order, so a gap or a sharp move can leave a difference, and the actual loss can be larger than “stop distance × lot size” suggests.
4. Using market orders as usual around major news
Around data releases the market jumps quickly and the spread can widen several times (as part five explained), so slippage and the spread widen together. It is not that you cannot use a market order, but at those moments the cost of “guaranteed fill” can be especially high; if an order does not have to go in right now, waiting for quotes to settle is also an option.
How to place them in MT5
- Press F9 (or New Order on the toolbar) to open the new order window.
- To fill at market: set Type to Market Execution (depending on the platform settings it may also show as Instant Execution, etc.), enter the volume, and press Sell or Buy.
- For a pending order: set Type to Pending Order, then choose Buy Limit, Sell Limit, Buy Stop or Sell Stop, enter the Price, optionally fill in Stop Loss, Take Profit and Expiration as well, and press Place.
- If the price is on the wrong side, the platform will not accept it; some instruments also require a minimum distance from the current price (the Stops level in the contract specification).
- Placed orders appear in the Trade tab of the Toolbox (Ctrl+T); right-click to modify or delete them.
There are also Buy Stop Limit and Sell Stop Limit pending order types: once triggered, they do not send a market order but place a limit order instead (for example, after a breakout, buy only once the price pulls back to a certain level).
FAQ
What is the difference between a market order and a limit order?
A market order fills immediately at the current price: it guarantees the fill, not the price, and slippage is possible. A limit order names a price more favourable than the current price and waits for it to come: it guarantees the price (or better), not the fill.
What is a stop order? Will it fill at the price I set?
It is sent only once the price touches the trigger price you set, and then it becomes a market order and fills. It is commonly used to exit with a stop loss or to enter on a breakout. It guarantees it is sent once touched, not the fill price; with a gap or a sharp move, slippage is possible.
How do I tell Buy Limit and Buy Stop apart?
Both are buy orders placed in advance. A Buy Limit goes below the current price and buys once the price falls to a cheaper level; a Buy Stop goes above the current price and buys once the price breaks out. Sells are the reverse: Sell Limit goes above, Sell Stop goes below.
Why has my limit order still not filled?
The most common reason is that the price has not reached the level you named. In MT5, buy pending orders are triggered by the ask, but candles are usually drawn with the bid, so the chart may look as if it touched while the ask is still one spread away.
Final thoughts
Part one said check the specification first, part two said calculate your lot size first, part three said margin is not a stop loss, part four said put your stop loss where you would be proven wrong, part five said being negative the moment you enter is normal, part six said overnight swaps belong in your costs if you hold overnight, and part seven covered the margin call and forced liquidation when your margin runs short. This one covers the last choice before you click submit: which type of order.
None of the three orders is better or worse; they simply guarantee different things.
A market order wants the fill, a limit order wants the price, a stop order wants confirmation.
Risk disclosure: CFDs are high-risk financial products and can lead to rapid loss of capital. Past performance does not guarantee future results. All strategies and backtests are for reference only and do not constitute investment advice. Market orders and stop orders do not guarantee the fill price, and limit orders do not guarantee a fill; slippage may occur during sharp moves, gaps or thin liquidity. The order types and execution methods actually available vary by platform, instrument and account type. Please read our Risk Disclosure carefully before trading.
Further reading:
- How Much Is 1 Lot? What the “1” in Your Order Box Actually Means
- How to Calculate Lot Size? With the Same $10,000, Gold and EUR/USD Can Differ by 6.7x
- What Is 100:1 Leverage? It Does Not Make You 100x More Money, It Lets You Carry More
- How to Set a Stop Loss? It Is Not How Much You Can Lose, It Is Where You Are Wrong
- What Is the Spread? Why Your Trade Is Negative the Moment You Buy
- What Is an Overnight Swap? Why Your Balance Changes Even When You Did Nothing
