What order types are available and when to use them?There are many order types that you can use on Binance Futures:
Limit Order A limit order is an order that you place on the order book with a specific limit price. When you place a limit order, the trade will only be executed if the market price reaches your limit price (or better). Therefore, you may use limit orders to buy at a lower price, or to sell at a higher price than the current market price.
Market Order A market order is an order to buy or sell at the best available current price. It is executed against the limit orders that were previously placed on the order book. When placing a market order, you will pay fees as a market taker.
Stop Limit Order The easiest way to understand a stop limit order is to break it down into stop price, and limit price. The stop price is simply the price that triggers the limit order, and the limit price is the price of the limit order that is triggered. This means that once your stop price has been reached, your limit order will be immediately placed on the order book.
Although the stop and limit prices can be the same, this is not a requirement. In fact, it would be safer for you to set the stop price (trigger price) a bit higher than the limit price for sell orders, or a bit lower than the limit price for buy orders. This increases the chances of your limit order getting filled after the stop price is reached.
Stop Market Order Similarly to a stop limit order, a stop market order uses a stop price as a trigger. However, when the stop price is reached, it triggers a market order instead.
Take Profit Limit Order If you understand what a stop limit order is, you will easily understand what a take profit limit order is. Similarly to a stop limit order, it involves a trigger price, the price that triggers the order, and a limit price, the price of the limit order that is then added to the order book. The key difference between a stop limit order and a take profit limit order is that a take profit limit order can only be used to reduce open positions.
A take profit limit order can be a useful tool to manage risk and lock in profit at specified price levels. It can also be used in conjunction with other order types, such as stop limit orders, allowing you to have more control over your positions.
Please note that these are not OCO orders. For example, if your stop limit order is hit while you also have an active take profit limit order, the take profit limit order remains active until you manually cancel it. You can set a take profit limit order under the Stop Limit option in the order entry field.
Take Profit Market Order Similarly to a take profit limit order, a take profit market order uses a stop price as a trigger. However, when the stop price is reached, it triggers a market order instead. You can set a take profit market order under the Stop Market option in the order entry field.
Trailing Stop Order A trailing stop order helps you lock in profits while limiting the potential losses on your open positions. For a long position, this means that the trailing stop will move up with the price if the price goes up. However, if the price moves down, the trailing stop stops moving. If the price moves a specific percentage (called the Callback Rate) in the other direction, a sell order is issued. The same is true for a short position, but the other way round. The trailing stop moves down with the market, but stops moving if the market starts going up. If the price moves a specific percentage in the other direction, a buy order is issued.
The Activation Price is the price that triggers the trailing stop order. If you don’t specify the Activation Price, this will default to the current Last Price or Mark Price. You can set which price it should use as a trigger at the bottom of the order entry field.
The Callback Rate is what determines the percentage amount the trailing stop will “trail” the price. So, if you set the Callback Rate to 1%, the trailing stop will keep following the price from a 1% distance if the trade is going in your direction. If the price moves more than 1% in the opposite direction of your trade, a buy or sell order is issued (depending on the direction of your trade).