What is the difference between a stop loss and a stop-limit order?

A stop-loss (a plain stop order) turns into a market order the moment your stop price is touched, so it prioritizes getting you out — but the fill price can be well below your stop if the market is moving fast or gaps down. A stop-limit turns into a limit order instead, so it will not fill below the limit price you set — protecting you from a terrible fill, but risking no fill at all if the price blows straight through your limit. Stop-loss favors certainty of exit; stop-limit favors certainty of price.

What is a trailing stop order?

A trailing stop is a stop that follows the price in your favor. You set it as a distance — a dollar amount or a percentage — below the current price for a long position. As the price rises, the stop ratchets up to stay that distance behind; when the price falls, the stop stays put. It triggers when the price drops by your trailing amount from its peak, letting you lock in gains as a stock climbs without having to move the stop by hand. It never trails downward, so it only tightens.

What is the difference between a market and a limit order?

A market order executes immediately at the best available price — you are guaranteed to trade, but not at a specific price. A limit order executes only at your specified price or better — you control the price, but you are not guaranteed to fill. Use a market order when getting in or out right now matters more than a few cents; use a limit order when the price you pay or receive matters more than executing this instant.

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Order types explained — and which one to use

Every order type trades one guarantee for another. A market order guarantees you’ll trade but not at what price; a limit order guarantees your price but not that you’ll trade; a stop guarantees you’ll get out but not how far below your stop. Pick the wrong one for the moment and it quietly costs you. Below: what each order does, when to use it, and exactly how it burns people — plus a short decision tree to point you at the right one.

Which order should I use? — pick your situation

The five order types

Market order

What it is: Executes immediately at the best price currently available. You are telling the market "fill me now, whatever the going price is."
When to use it: When execution certainty matters more than a few cents — entering or exiting a liquid, heavily-traded stock, or getting out of a position quickly.
When it burns you: On an illiquid stock, a fast-moving market, or outside regular hours, "best available" can be far from the last quote you saw. A thin order book means your order walks up (or down) the ladder and fills at a worse price than expected — slippage.

Limit order

What it is: Executes only at your specified price or better — never worse. A buy limit fills at your limit or lower; a sell limit fills at your limit or higher.
When to use it: When the price you pay or receive matters more than filling this instant — buying into a spike you don’t want to chase, or selling into strength at a target you’ve chosen.
When it burns you: The market can run right past your limit and never come back, leaving you unfilled while the move happens without you. A limit protects your price at the cost of certainty — set it too far from the market and it may simply never trigger.

Stop / stop-loss order

What it is: A resting order that stays dormant until the price touches your stop level, then converts into a market order and fills at whatever is available.
When to use it: To cap a loss or protect a gain automatically — you decide in advance the price at which you want out, and the order does it without you watching.
When it burns you: Because it becomes a market order, a fast drop or an overnight gap can fill you far below your stop. A stop set at $90 gives no promise of $90 — if the stock gaps to $80 at the open, you sell near $80. It guarantees you get out, not the price you get out at.

Stop-limit order

What it is: Like a stop, but it converts into a limit order instead of a market order. You set both a stop (the trigger) and a limit (the worst price you’ll accept).
When to use it: When you want a stop’s automation but refuse to be filled at a fire-sale price — you’d rather stay in the position than sell far below your limit.
When it burns you: If the price gaps straight through your limit, the order triggers but never fills — the exact scenario a stop-loss was meant to protect against. You avoid a bad price by risking no exit at all, so in a real crash a stop-limit can leave you holding the whole fall.

Trailing stop order

What it is: A stop that follows the price in your favor by a set distance (a dollar amount or a percentage). It ratchets up as the price rises and holds when the price falls, triggering when the price retraces by your trailing amount from its peak.
When to use it: To let a winner run while locking in gains — you don’t have to keep moving your stop up by hand as the position climbs.
When it burns you: Set the trail too tight and normal volatility knocks you out right before the stock continues higher. And because it ultimately becomes a market order on trigger, it carries the same gap-and-slippage risk as any stop in a fast market.

Order types compared

Order	Guarantees	Doesn’t guarantee	Best for	Main risk
Market	Execution (you will fill)	Your price	Getting in/out now, liquid names	Slippage on thin or fast markets
Limit	Your price or better	Execution (may not fill)	Price discipline, no chasing	Missing the move entirely
Stop / stop-loss	Exit once triggered	Your exit price	Automatic loss cap, hands-off	Gapping through — filled far below stop
Stop-limit	Your price floor once triggered	Execution (may not fill)	Stop automation without a bad fill	No fill at all in a fast drop
Trailing stop	Follows price up, exit on retrace	Your exit price	Locking in a winner’s gains	Whipsaw on a tight trail; gap risk

A note that spans all of them: order behavior is broker- and exchange-universal in mechanics, but the exact rules — how far after-hours orders route, whether stops trigger on the last trade or the bid/ask, minimum increments — vary by broker. The concepts here hold everywhere; check your own broker for the fine print before you rely on a resting order to protect a position.

Educational explanation of how order types work generally — not a recommendation to place any specific order or trade any security, and not a description of any one broker’s rules. Educational tool, not financial advice. Your answers never leave the page — the decision tree runs entirely in your browser. The page loads standard pageview analytics, which never sees them.

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