9.4 Lessons learnt

The two main order types are: market orders and limit orders

• A  market order is an order to buy or sell a stock at the market’s current best available price.
• A  limit order is an order to buy or sell a stock with a restriction on the maximum price to be paid or the minimum price to be received.
• You may have your preference of order type. However, in order to decide which suits best in different situations, you should know the characteristics of both order types.
• The main risk of a market order is that the outcome of the price can be significantly different than you expected. 
• The risk of a limit order is that the order won’t be executed. 
•  A stop-loss order enables you to define the level where a position must be closed to prevent losses to become too big.