All language subtitles for 2. Market And Limit Orders

The simplest and most common type of order is a market order.

In fact, when most people think of like, well, I bought a security, I sold a security, really what

they're talking about is a place the market order is what they're doing in market or in the kit that

you're willing to take whatever price is presented to.

You know, when the order is executed, you can say, well, that's the the market price as an example.

Now, it's not a locked in market price.

You might see it on your screen and place the order.

But the time by the time the order is executed, it might be slightly higher or lower than expected.

So it won't necessarily be the exact price that you're seeing once, because it all depends on the timing

of the order.

Execution securities are frequently traded, will execute faster heavy volume type things.

But some things, like some securities, they don't trade as often and have very low volume.

It might take a while for that order to be processed to find a buyer and seller.

So a market order very simply on buying or selling at the market price.

And then there's another thing called a limit order where you can kind of just that.

A limit order basically allows you to limit either the maximum price you will pay or the minimum price

you're willing to accept when buying or selling a security, a place limit order, say I want to buy,

but I don't want to pay more than this.

Or if I'm selling, I don't want to pay.

I don't want to sell for less than that is the idea.

And that's the primary difference between a market order and a limit order is that a limit order may

not be executed at the target limit.

Prices never reach.

So let's say the market price is at 70 and you put in and you put in a market order, it would be executed.

But if you, let's say, said, I don't want to do that.

I want to I don't want to pay somebody, I'm willing to pay sixty eight.

Well, then it might not ever be executed.

So limit orders.

Are you executing the order in which they are received as far as from nineteen brokers.

So, you know, possibly order orders not executed at a price.

It's the limit target and then moves are bought real quickly before the order is executed.

So even if you see it kind of flash like oh it should be getting executed because there might be even

more, a little bit more delay there.

That might happen as well.

So let's look at the example of that of both of these.

Let's say you have the security here and and you've done your trendlines.

And you can see, oh, look at this nice trend here on the image on the right here.

And you see one to buy in the second touch or, you know, near near that trend line.

All right.

So you see that let's say it's on a daily time frame.

And so you're going to buy in the second.

They've seen the second touch for us to close.

Now you're buying the second day.

And as you can see on that second day, there's the last candlestick in our image here.

You can see there's a wide range of prices from high to low, tops around seventy three, and then goes

down as far as the range, down to about seventy one.

So if you place the market order, depending where you're buying in the day, it could end up in any

of those prices.

And let's say you're looking at it, it's around 70 to 75 or something to 80.

You place a market order and it gets executed and ends up being executed seven to seventy five.

So let's see if that's what you're looking at in this particular example.

But let's say you're looking at 70 to 75 when you say, well, I don't want to pay that.

I want to put a limit order and I want to pay less than that.

This is a buying situation.

So if you put in a limit order for seventy one fifty, let's say, well, that would be executed.

You could see depending on how all flows during the day.

But as you can see, at some point, there's more likely a chance is going to hit that seven one fifty

in that range throughout the day as it would have turned out, you don't know ahead of time.

That's how it it turned out.

But let's say in this day and you're liking this trend, you say, well, I don't want to pay more than

Sony fifty sixty seventy point five.

Oh, well, you can see it never really got that low as far as in the trading range.

So your order never been executed, then you would have to wait till the next day and place a different

type or cancel that order in place, a different type of market order or raise your limit, order up.

So that's the thing with market orders, you're going to be able to buy or sell right away and then

with a limit order you you're setting some guidelines around that in terms of buying or selling and

just understand that hang with guidelines to put your order might not be executed at all.

And don't be disappointed in that.

That's just all part of the strategy of using limit orders to limit, you know, how how you'll buy

and how low you would be willing to sell to give a little more protection around that.