Unit 2 · Level 1 · How Exchanges Work
Market vs limit orders
A MARKET order says: 'Buy now, whatever the price.' Fast, guaranteed to fill, but you accept the current ask. A LIMIT order says: 'Buy only at my price or better.' You control the price, but it might never fill.
Free to play. No ads, no token, no account needed to start.
What you get asked
You want to buy ETH RIGHT NOW and don't mind the exact price. Which order?
Market = speed. You take whatever the best ask is at that instant.
Apple trades at $230. You'd happily buy it, but only if it dips to $220. Which order?
Your limit order sits in the book at $220, patiently waiting. The trade-off: if the price never dips, you never buy.
A limit order guarantees the ___, but not that it will ever fill.
Market orders guarantee the fill; limit orders guarantee the price. You can never have both guarantees at once.
In a thin, illiquid market, why do experienced traders prefer limit orders?
You learned this in the order book lesson: thin book + market order = slippage. A limit order caps your damage. Concepts stacking already!
True or false: if you place a limit buy at $220 and the price crashes straight to $200, you'll have bought at $220.
Careful: your limit fills when price reaches it, even mid-crash. 'I got my price' and 'I'm happy about it' are different things. Stops help with that. Next lesson.
The rest of this unit
Order books, order types, stop-losses, and the silent costs of every trade.