Prerequisite: Reading a currency pair
Learning objective
Distinguish price control from execution certainty and recognise stop-order risk.
A market order seeks prompt execution at available prices. It does not lock the last displayed price. Rapid changes, gaps or limited depth can cause slippage, especially with larger orders.
A limit order sets a boundary: a buy at the limit or lower, a sell at the limit or higher. It may not execute. A chart touching the limit is not proof your order filled; order priority, spread and the provider’s rules matter.
A stop commonly becomes a market order when its trigger is reached, so the stop price is not necessarily the execution price. A stop-limit adds a price boundary but can remain unfilled. Forex and CFD platforms can use different trigger sides; read their order specification.
Worked example
Hypothetical buy limit: 100. If the market offers 101, the order need not fill. If the market offers 99, a fill may occur at 100 or better under the venue’s rules. This is an order-mechanics illustration, not an entry recommendation.
Common mistakes
A normal stop is not a guaranteed maximum loss. Stop-limit controls price but may fail to exit.
Practice
Find your provider’s trigger-side rule and explain what happens to a stop through a gap.