Order Types Glossary — Market, Limit, Stop, OCO, Trailing, and More

Order types are the building blocks of trade execution. Every entry and exit in algorithmic trading uses one of a small set of order primitives — market orders, limit orders, stop orders, and combinations of these. The choice of order type affects fill probability, slippage exposure, and trade-management flexibility.

The foundational distinction is market vs limit. Market orders prioritise fill speed (execute now at the best available price); limit orders prioritise price quality (execute at this price or better, even if it means no fill). Most EA entries use market orders for breakouts and reactions; most exits use limit orders for take-profits and stop orders for losses.

Stop-loss orders are the bedrock of risk management. Every position should have a stop, period. Variations on the basic stop-loss include trailing stops (the stop moves with favourable price), breakeven stops (the stop moves to entry once a profit threshold is hit), and stop-limit (the stop activates a limit order rather than a market order). Each variant has specific use cases; understanding when to use which is fundamental EA design knowledge.

OCO (one-cancels-other) orders link two pending orders so that execution of one cancels the other. The most common form is the stop-loss + take-profit pair attached to a position. More advanced OCO setups handle breakout entries (buy-stop above range + sell-stop below range, with cancellation on first fill).

Partial close is a position-management technique where some of the position closes while the rest remains. Common pattern: close half at +1R to lock in profit, move the remaining half to breakeven and let it run. This 'free trade' setup is widely used in trend-following EAs.

Time-in-force (GTC, FOK, IOC, GTD) specifies how long an order stays active. For scalpers, FOK (fill or kill) prevents partial-fill complications. For swing traders, GTC (good till cancelled) is the default. Understanding TIF matters for EAs that submit orders programmatically.

For commercial EA evaluation: look for documentation of which order types the EA uses for each entry/exit. EAs that use only market orders are simpler but slip more; EAs that use limit orders for entries are more execution-quality-sensitive. The choice should match the strategy and broker.