Market Orders – What Are Them And How To Use Them To Increase Your Profits

Market Orders What Are Them And How To Use Them To Increase Your Profits

These type of orders are an important and useful toll at your disposal when trading online. They are not complicated, they are in fact quite simple, but it is essential, almost mandatory, that you know exactly how this type of order works when placing orders in your home broker, or when giving your brokers instructions to set the orders for you.

Sell and buy orders

These types of orders will execute immediately and will be executed at the best price available at the moment in the market. So, if you are issuing a buy market order, that means that your order will be executed instantly - if there are sellers for that stock at the moment; if there is none, you might reconsider buying that stock and you will be buying that stock for the best ask price that any seller is willing to sell it to you.

On the other hand, if you are issuing a sell market order, that means that you will be selling a stock to the highest bid price that is available at the moment that you have inserted your order. These type of orders are more common since they happen when everyone is running to the hills and they do not want to hold the stock just because they could not sell it for a difference of two cents.

Conclusion

Market orders can be extremely useful but should be handled with caution. As a general rule, if you are "bull", then try to use more sell orders when things start to look ugly. Limit orders are also useful. They will enable you to get that stock for a better price in addition to be able to better control your emotions whilst trading. Make sure you do a full research on understading the differences between market and limit orders and how to make proper use of them. This for sure will have a great impact on your trading skills.

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