Lesson 09 · 5 min
The buttons on the ticket
Market, limit, stop, and take-profit are four different promises. None of them is a guarantee of a perfect price.
Before leverage, learn the verbs. Most blown accounts were not confused about bitcoin. They were confused about which button they pressed, and what the venue was allowed to do next.
Market
Fill me now.
You pay the spread and whatever the book has.
Limit
Only at my price or better.
You might wait, or fill only part.
Stop
If price reaches this bad level, exit.
A request. Fast markets fill worse.
Take-profit
If price reaches this good level, exit.
Same machine as a stop, aimed the other way.
- Market crosses the spread and fills now. On a thin coin the fill can be far from the last price. That gap is slippage.
- Limit waits for your price or better. It may never fill. A partial fill is normal.
- Stop and take-profit are exit plans. Fast markets fill them worse than the number you typed. Reduce-only, where you see it, keeps an exit from accidentally opening a new side.
In one sentence. A stop is a request to leave. Liquidation is the venue deciding you have already left.
A stop-loss is best described as…