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Crypto Order Types: Market, Limit, Stop & Stop-Limit

TL;DR. A market order fills at once at whatever price is available: certain to fill, uncertain in price, and charged the taker fee. A limit order rests in the book and fills at your price or better: certain in price, uncertain to fill, and charged the lower maker fee. Every other crypto order type is a variation of those two with a trigger attached. For a scalper the choice is not academic: at thirty round trips a day the fee difference alone is several percent of the account per month, and the execution lesson puts the exact number on it.

Prerequisites for this lesson: How crypto prices move (aggressive and passive orders, the resting book). Lesson 2 of the basics section.

The two fundamental orders​

Market order. "Buy now, whatever the price." The exchange matches you at once against the best resting orders on the other side. You are guaranteed a fill and not guaranteed a price. In a fast or thin market the fill can be several ticks worse than the price you saw, which is called slippage.

Limit order. "Buy at $100,000, no higher." The order rests in the book until someone sells at that price. You control the price and not the fill: if price never returns to $100,000, the order sits there.

Maker and taker​

Exchanges charge by which side of the trade you were on:

  • Taker: you removed liquidity by hitting a resting order. Market orders are always taker; a limit order priced through the spread fills at once and is taker too.
  • Maker: you added liquidity with a limit order that rested in the book before it filled.

A typical schedule on a major perpetuals venue at the entry tier:

Fee typeTypical rateOn a $10,000 position
Taker0.05%$5.00 per leg
Maker0.02%$2.00 per leg

Three dollars per leg is six dollars per round trip. At thirty round trips a day that is $180 a day, and over a 22-day month about $4,000 on a $10,000 account, before spread and slippage. That arithmetic is the reason professional scalpers are strict about limit orders for every planned entry. Some venues pay a rebate (a negative maker fee) to high-volume makers; at retail tiers the maker fee is usually a small positive number, and the exchanges section has the current schedules.

Stop orders​

A stop order waits for price to reach a trigger and then submits a market or limit order. Two uses:

Stop-loss. Long from $100,000 with a stop at $99,800: if price trades at $99,800 the position is closed, and the loss is capped near $200 per BTC. The position sizing lesson sizes every trade from this distance.

Stop-entry. To buy a breakout above $101,000 without watching the screen, place a buy stop at $101,050. The trend scalping lesson uses this order to enter above a closed signal bar.

Stop-market and stop-limit​

A stop-market triggers a market order: the exit is certain, the price is not, and in a fast market or a liquidation cascade a large stop-market can fill well past the trigger.

A stop-limit triggers a limit order at a price you set: the price is controlled and the fill is not. If price gaps through the limit, the order sits unfilled while the loss grows. For stop-losses most scalpers use stop-market, because a few ticks of slippage on an exit is almost always cheaper than a stop that does not fill.

Reduce-only​

Futures exchanges offer a reduce-only flag. A reduce-only order can close or shrink a position and can never open or add to one. Use it on every stop-loss and take-profit. Without it, a stop that fires after the position has already been closed by another order opens a fresh position in the wrong direction, which is an avoidable and surprisingly common accident.

Post-only​

A post-only limit order will execute only as a maker. If it would cross the spread and fill as a taker, the exchange cancels it instead. It guarantees the maker fee at the cost of occasionally not being in the trade. For planned entries at a level in a calm market it is the default; for a fast entry it is the wrong tool.

Practical use for scalpers​

  • Entries: a limit order at or just inside the level, and let price come to you. Lower fee, often a better price. Post-only when the market is calm.
  • Take-profit: a limit order at the target. Price often turns exactly at an obvious level, and a resting limit is filled there rather than a tick below it.
  • Stop-loss: stop-market, reduce-only. Certainty of exit beats certainty of price when the trade is wrong.
  • Breakout entries: a stop-entry when the plan is to buy confirmation rather than anticipation. Size down, because a stop-entry fills at the trigger or worse, and the range breakout lesson shows what the slippage costs.

Common mistakes​

  • Market orders for every entry. They feel safer because the fill is certain. Certainty of fill at an uncertain price is expensive over hundreds of trades, and the execution lesson shows the monthly bill.
  • Stops at round numbers. $100,000, $105,000: everyone's stops are there, and the stop hunt lesson explains why those clusters get visited. Put the stop beyond the obvious price, or set the distance with the ATR.
  • Forgetting reduce-only. A stop that opens a new position instead of closing the old one.
  • Limits a single tick inside the spread. They fill only when the market comes through you, which on a fast move means the market is now going the other way. A limit a few ticks inside the current price fills more reliably and still saves most of the taker fee.
  • Stop-limit stops in fast markets. The gap through the limit price is exactly the event a stop is meant to protect against.

Where to go from here​

You know the orders. The next lesson puts a monthly number on choosing between them, and covers the two costs the fee schedule does not show: spread and slippage.

Related guides:

This article is educational content, not investment advice. Trading derivatives carries substantial risk, including total loss of capital. See disclaimer.

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