types of trading orders: complete guide for futures traders 2025
most traders are leaving money on the table with terrible order execution.
over the thousands of traders I’ve worked with, I see the same pattern: they don't know when to use buy stop orders for breakouts versus buy limit orders for pullbacks. they're chasing price instead of making sure their orders are set and ready to execute before the move actually happens.
here's what actually works... determining your entry spots before the market opens and using the right order types to get filled at good prices. when you set your buy stops above resistance for breakout trades or place buy limits at key support levels for pullback entries, you're not scrambling when price moves through your levels.
that's why I've pulled together everything you need to know about trading orders, backed by real executions and actual trading scenarios.
let's get into it...
table of contents
- basic order types
- stop orders explained
- time-based order types
- advanced order types
- specialized order types
- choosing the right order type
- frequently asked questions
- key takeaways
basic order types
understanding the fundamental types of trading orders is one of the first steps to profitable trading — if you can’t master these, you’ll never make it as a trader.
market orders
market orders execute immediately at the best available price. when you hit "buy market" or "sell market," you're telling your broker to get you filled right now, regardless of the exact price.
market orders prioritize speed over price control. these are the types of orders that are useful when price moves against you on unexpected news — you can get out almost instantly depending on the ticker you’re trading.
when to use market orders:
- urgent entry or exit situations
- highly liquid markets with tight spreads
- small position sizes relative to daily volume
- when speed matters more than a few cents
when to avoid market orders:
- volatile market opens or closes
- low-volume stocks or futures contracts
- large positions that could move the market
- when you have time to plan your entry
one advantage futures traders have over stock traders is no pattern day trader (PDT) restrictions. you can make as many day trades as you want with futures, which means you can be more selective about your entries instead of rushing with market orders.
limit orders
limit orders execute only at your specified price or better. for buy limits, "better" means lower than your limit price. for sell limits, "better" means higher than your limit price.
this is where most traders start thinking strategically about execution.
limit order success factors:
- placement at logical technical levels
- understanding current market depth
- patience to let the market come to you
- proper position sizing relative to volume
buy limit vs sell limit orders
this is where the pre-market planning really pays off. you need to understand the difference between these order types and when to use each one.
- buy limit orders are set below the current market price. you're essentially saying "I want to buy this, but only if I can get it at this lower price." these are perfect for pullback entries when you've identified support levels before the market opens. if you are trading the gap fill report and using the by spike as an entry area, you can set limit orders to match the data.
example: if NQ is trading at 16,500 and you want to enter on a pullback to the 16,450 support level, you set a buy limit at 16,450. if price pulls back and hits your level, you get filled. if it doesn't, you stay out.
- sell limit orders are set above the current market price for profit-taking or short entries. you're saying "I'll sell at this higher price."
here's what separates profitable traders from the rest: they identify their key levels during their pre-market analysis and place their orders accordingly. no emotional decision-making during market hours.
stop orders explained
stop orders are designed to trigger when price reaches a specific level, but understanding the different types is crucial for proper execution.
stop market orders
a stop market order becomes a market order when your stop price is hit. this gives you guaranteed execution but not guaranteed price.
the trigger price is where your order activates, but the execution price depends on what's available in the market when your order hits. during that massive VIX spike in February, we saw stop losses trigger at $100 but execute at $97.50 due to the speed of the move.
stop market order characteristics:
- guaranteed execution (you will get out)
- no guaranteed price (you might not like the fill)
- can experience significant slippage in volatile markets
- best for position protection when you absolutely must exit
buy stop vs sell stop orders
this is where traders get confused, but it's actually straightforward once you understand the logic.
- buy stop orders are placed above the current market price. you're saying "if price breaks above this level, buy me in." these are perfect for breakout strategies when you want to enter momentum moves.
example: TSLA is trading at 192 and you see resistance at 194. you place a buy stop at 16,555. if price breaks through resistance, your order triggers and you're in the momentum move.
- sell stop orders are placed below the current market price. these are typically stop losses for long positions or breakout entries for short positions.
here's why planning is so important:
during your pre-market analysis, identify key resistance levels where you want to enter breakouts. set your buy stops just above those levels. when the breakout happens, you're positioned automatically instead of scrambling to chase.
time-based order types
the duration of your order matters just as much as the price. different time-based order types serve different trading strategies.
day orders
day orders expire at the end of the trading session. for stocks, that's 4:00 PM EST. for futures, it depends on the contract, but most major contracts have defined session times.
our fill rate analysis shows day orders work well for intraday strategies but can leave you missing opportunities in extended sessions. if you're planning trades around specific intraday levels, day orders keep you focused on the current session without overnight exposure.
day order advantages:
- no overnight risk from forgotten orders
- forces daily trade planning discipline
- prevents stale orders from triggering inappropriately
day order disadvantages:
- miss extended hours opportunities
- requires daily order management
- can expire just before favorable moves
good-til-cancelled orders
GTC orders remain active until you manually cancel them or they execute. most brokers limit GTC orders to 90-180 days, but that's usually plenty of time for technical setups to develop.
our statistics show GTC orders have a 58% higher success rate for swing trading strategies compared to day orders, primarily because they capture moves that develop over multiple sessions.
the key is proper order management. set calendar reminders to review your GTC orders weekly. market conditions change, and orders placed two weeks ago might not make sense anymore.
GTC order best practices:
- weekly order review and adjustment
- tie orders to technical levels, not arbitrary prices
- understand your broker's GTC limits
- use alerts to monitor your resting orders
after hours and premarket orders
extended hours trading requires special consideration. most brokers offer "day+" orders that remain active during premarket and after-hours sessions.
the challenge? liquidity drops significantly outside regular hours. our data shows average spreads widen by 2-3x during extended hours, which impacts your execution quality.
during earnings season, we see 40% more price gaps during extended hours. if you're holding positions overnight, understanding how your orders behave during these sessions is critical.
extended hours considerations:
- wider spreads increase execution costs
- lower volume can cause unpredictable fills
- news events often break during extended hours
- not all order types are supported by all brokers
advanced order types
once you master the basics, these advanced order types can automate much of your trade management and improve your execution quality.
OCO orders
one-cancels-other (OCO) orders let you place two orders simultaneously where executing one automatically cancels the other. this is perfect for exit strategies where you want both a profit target and stop loss active.
here's a real example from last month's 3.2% NQ rally: trader enters long at 16,400, immediately places an OCO with a sell limit at 16,600 (profit target) and sell stop at 16,300 (stop loss). when price hits 16,600, the profit target executes and the stop loss automatically cancels.
OCO variations:
- exit OCO (profit target + stop loss for existing position)
- entry OCO (breakout above resistance or breakdown below support)
- contingent OCO (triggered by separate market conditions)
the power of OCO orders is removing emotion from exits. you decide your risk/reward before entering the trade, not during the heat of the moment.
bracket orders
bracket orders are the holy grail of order types - they combine your entry, profit target, and stop loss into one coordinated strategy. unfortunately, most retail brokers don't offer true bracket orders.
here's how they work: you specify an entry order (market, limit, or stop), and simultaneously set your profit target and stop loss. once the entry fills, both exit orders become active as an OCO.
bracket order components:
- entry order (gets you into the position)
- profit target (limit order above/below entry)
- stop loss (stop order protecting against adverse moves)
futures platforms generally offer better bracket order support than stock platforms. this is another advantage of trading futures - you get institutional-level order types that help automate your trade management.
for brokers without true bracket orders, you can simulate the same result: enter your position, then immediately place an OCO with your profit target and stop loss.
trailing stop orders
trailing stops automatically adjust your stop loss as price moves in your favor. instead of a fixed stop price, you specify a dollar amount or percentage that "trails" behind the market price.
example: you buy at $100 with a $5 trailing stop. initially, your stop is at $95. if price rises to $110, your trailing stop moves to $105. if price then falls to $105, your stop triggers and you're out with a $5 profit instead of holding for a bigger loss.
our backtesting shows trailing stops work best in trending markets but can hurt performance in choppy, sideways markets. during volatile periods, tight trailing stops get stopped out by normal market noise.
trailing stop considerations:
- trail amount should reflect the instrument's volatility
- wider trails capture more of big moves but give back more profit
- tighter trails protect profits but increase false signals
- works better with liquid, trending markets
specialized order types
these order types serve specific situations and are more commonly used by institutional traders, but understanding them helps you make better execution decisions.
fill-or-kill orders
FOK orders demand immediate, complete execution or immediate cancellation. there's no partial fills, no waiting - it's all or nothing, right now.
the reality? FOK orders rarely get filled unless you're trading highly liquid markets with tight spreads. our execution data shows FOK orders have a 23% success rate compared to 67% for regular limit orders.
when FOK might make sense:
- large block trades where partial fills create problems
- arbitrage strategies requiring simultaneous execution
- situations where partial positions change your risk profile significantly
for most retail traders, FOK orders are unnecessarily restrictive. you'll miss more opportunities than you'll capture.
immediate-or-cancel orders
IOC orders attempt immediate execution but allow partial fills. any portion not filled immediately gets cancelled.
this is more practical than FOK because you get whatever shares are available at your price right now. if you want 1,000 shares and only 600 are available, you get the 600 and the remaining 400 order cancels.
IOC vs FOK comparison:
- IOC allows partial fills, FOK requires complete fills
- IOC success rate: 54% vs FOK success rate: 23%
- IOC better for traders who can work with partial positions
- FOK better for strategies requiring exact position sizes
all-or-none orders
AON orders must fill the complete quantity, but unlike FOK orders, they can wait for the right opportunity. the order stays active until enough shares become available at your price.
the problem? limited broker support and lower priority in order matching systems. most exchanges prioritize regular limit orders over AON orders, so you might miss fills even when your price trades.
AON limitations:
- lower priority in order matching
- limited broker and exchange support
- can miss opportunities due to size requirements
- better alternatives usually available
practical alternative: break large orders into smaller sizes that are easier to fill.
iceberg orders
iceberg orders hide your true order size by only displaying small portions at a time. as each visible portion fills, the next piece becomes visible.
example: you want to sell 10,000 shares but don't want to show that size to the market. an iceberg order might display 500 shares. when those fill, another 500 appear, and so on.
here's the honest reality check: most retail traders don't need iceberg orders. unless you're trading position sizes that would significantly impact the market, the added complexity isn't worth it.
iceberg orders are useful for:
- institutional-size positions
- illiquid markets where large orders cause significant price impact
- strategies requiring stealth execution
post-only orders
post-only orders ensure you pay maker fees instead of taker fees by guaranteeing your order goes into the order book rather than executing immediately.
if your post-only order would execute immediately against existing orders, it gets cancelled instead. this originated in crypto markets but now many traditional brokers offer post-only functionality.
when post-only makes sense:
- trading strategies where maker rebates improve profitability
- high-frequency trading where fee structure matters
- large volume traders where fee differences add up
for typical retail trading volumes, the fee difference between maker and taker orders usually isn't significant enough to justify the added complexity.
choosing the right order type
the best order type depends on your specific situation. here's a practical decision framework based on the key factors that matter most.
market conditions:
- volatile markets: favor limit orders over market orders
- trending markets: consider trailing stops for exits
- choppy markets: use wider stop distances or avoid stops entirely
- low volume: stick to simple order types with better fill probability
position size relative to daily volume:
- small positions (0.1% of daily volume): any order type works
- medium positions (0.5-2% of daily volume): avoid aggressive market orders
- large positions (5%+ of daily volume): consider iceberg or time-weighted strategies
time urgency:
- immediate execution needed: market orders
- can wait for better price: limit orders
- want to catch breakouts: buy/sell stops
- managing overnight risk: day orders vs GTC based on strategy
practical scenarios from the trading floor:
when SPY is printing 50M+ volume and you need in fast, market orders make sense. the slippage on liquid ETFs during high-volume periods is usually minimal.
during earnings announcements when spreads widen, limit orders protect you from paying inflated prices. we've seen bid-ask spreads double or triple around earnings releases.
for overnight holds and gap risk management, decide whether you want your protective orders active during extended hours. GTC orders with day+ time-in-force keep you protected, but consider the wider spreads.
cost considerations:
factor in both commission costs and market impact. a limit order that saves you $50 in slippage but costs an extra $10 in fees because it doesn't fill is still worthwhile if you can afford to wait.
our data shows the break-even point where limit orders outperform market orders is typically around $5,000 position size, depending on the instrument and market conditions.
frequently asked questions
- what's the difference between stop loss and stop limit orders?
stop loss orders become market orders when triggered, giving you guaranteed execution but not guaranteed price. stop limit orders become limit orders when triggered, giving you guaranteed price but not guaranteed execution.
during the March 2020 volatility, stop loss orders ensured traders got out of positions (even at bad prices) while some stop limit orders never filled because price gapped below their limit levels.
- why did my limit order execute immediately like a market order?
your limit price was more aggressive than the current market price. buy limits above the market or sell limits below the market execute immediately against existing orders.
this often happens when traders don't check current bid/ask spreads before placing orders. always verify your limit price relative to the current market.
- can I use bracket orders for futures trading?
most retail brokers don't offer true bracket orders, but futures platforms generally have better advanced order support than stock platforms.
you can simulate bracket orders by entering your position first, then immediately placing an OCO order with your profit target and stop loss.
- do day orders work in premarket trading?
depends on your broker. some support "day+" orders that remain active during extended sessions, others require GTC orders for premarket and after-hours trading.
check your broker's specific rules because this varies significantly between platforms.
- what happens to my GTC order over weekends?
GTC orders remain active until Monday's market open, but be careful of weekend news that could cause gaps past your order levels.
many traders prefer to cancel pending orders before weekends and reset them Sunday evening after reviewing any weekend developments.
- should i use trailing stops for all my trades?
trailing stops work well in trending markets but can hurt performance in choppy conditions. our backtesting shows they're most effective when the trail distance matches the instrument's average true range.
in sideways markets, fixed stops often outperform trailing stops because they don't get triggered by normal market noise.
key takeaways
here's what actually matters when it comes to types of trading orders:
- start with the basics: market orders for speed, limit orders for price control, stop orders for protection. master these before moving to advanced order types.
- plan before the market opens: the biggest advantage comes from identifying your key levels and placing appropriate orders ahead of time. buy stops above resistance for breakouts, buy limits at support for pullbacks.
- understand the tradeoffs: every order type involves compromises between speed, price control, and execution certainty. there's no perfect order type for every situation.
- time-based orders matter: day orders keep you disciplined but can miss extended-hours opportunities. GTC orders capture multi-session setups but require active management.
- advanced orders automate decisions: OCO and bracket orders remove emotion from exits by making your risk/reward decisions before entering trades.
- most specialized orders aren't necessary: FOK, AON, iceberg, and post-only orders serve specific institutional needs but add complexity without much benefit for typical retail trading.
- context determines choice: volatile markets favor limit orders, trending markets suit trailing stops, and urgent situations call for market orders.
- execution quality beats order type: a well-planned market order often outperforms a poorly-placed limit order. focus on your analysis and timing first, then choose the appropriate order type.
remember: the best order type is worthless without a solid strategy behind it. that's where our data-driven approach at edgeful comes in - giving you the statistical edge to make better trading decisions.
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