So what are the main order types in the thinkorswim platform in this video i'm
going to talk about the difference between a market order a limit order a
stop-loss order and a stop-loss limit order and how you can use them in your
trading hey how's it going on this channel you will learn the steps I took
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check out the notes and links in the description below I'll list out any
valuable resources down there now today we're going over basic order types in
the thinkorswim platform the first order type we're going to talk about is a
market order now to see those different order types just when you have a buy or
sell order open you just go to the order type and then click that tab and it will
pop those different order types in now the first one here is a market order and
all a market order is is you're telling it that you just want to get in at the
current market price you're essentially saying that I don't care what price I
buy it at I just want to get in right now and so generally with market orders
you will instantly get filled or you'll instantly buy or sell whatever stock you
want and market orders are good for buying into a strong momentum move that
a stock is having if it just keeps going up and up or just keep selling off
really quickly and the price just keeps moving a market order is probably the
best way to try and get in or get out of a trade in those circumstances but
generally try and stay away from using market orders because they can cause
slippage now slippage is essentially you gain field at a worse price than you
thought so if the market is trading at 280 and you put in a market order you
might actually get filled at 279 and ninety-five cents so it's not a huge
deal but over the long term losing those five cents over
over and over especially if you're trading a lot of shares can definitely
add up and so you definitely want to be careful with using market orders they
shouldn't be your go to kind of order when trading you should only really use
them when you really need to get in and out of a trade and the market is moving
rapid moving on to the next order type we have a limit order and so a limit
order is you telling the system the exact price you want to buy or sell
shares at so you can tell it to buy shares either above the market or even
at the market so it's a another safer way to try and buy at the current market
price so you don't have slippage you can just if the market is trading at 280 you
can tell it to buy it 280 and you most likely will get filled because the
markets trading around that area but another thing you can do with limit
orders is have them so you can designate when you want to buy and at what price
so if a market is trading at about 280 and you want to buy at maybe 279 you can
put a limit order in down here at about 279 and when the market comes down to
that price you will then buy it so it's a way to essentially you can
automate your trading by telling the system that you want to buy the shares
at this price and so you don't have to watch the market all the time and wait
for the market to come down to that level to put in a order limit orders
allow you to designate the price you want to buy or sell out so if you had
already bought a stock you could place a limit order above the market up here and
then when the market price traded up to that level you would then sell and
potentially you could have was sold right at support maybe when you weren't
looking at the market and then you could come back and see that the market are
already sold off and because you had a limit order aren't you
there your shares would have sold and you would have locked in that profit
without having to worry or pay attention to the market all the time
so limit orders you can either use them to buy at a lower price or buy at the
current price without having to worry about slippage or sell at a higher price
so you don't have to worry about managing your exits on your trades as
closely now the next order type is a stop loss now the next order type is a
stop loss or how thinkorswim has it is they just sit call it a stop now a stop
is essentially a limit and a market order put together so how it works is if
you wanted to have a buy stop you tell the market where you want to buy so buy
stops are used for buying into a move essentially so if you have a buy stop at
let's say 283 when the market trades up into 283 you essentially tell the system
that I want to buy here and it will convert your buy stop into a market
order and so then you will send a market order into the system at 283 and get
filled at pretty much 283 with that market order so this is another way to
kind of automate your trading and essentially buy into a move if you think
that once it gets up to 280 3 I just want to buy it because you know maybe
you're using some kind of breakout strategy now on the flip side you can
use this to get out of a trade if the market moves against you and gets to a
point where you just want to get out of the trade so if you had a stop loss set
at let's say 277 and the market traded down 277 and hit that stop loss of yours
or the stop you would then have a market order sent in to sell your shares at
that level and then you would then be out of the trade you can also use this
kind of setup to either short the market or close a short just on the
kind of flipside of how you enter the trade you can also use this to short the
market if it gets down to a certain level as well you wouldn't have a
position open at the time so having a stop-loss here would actually make you
short shares and then you would be short a position and you would want to then
probably place a stop-loss up here somewhere to close out of your short
position if the market got up to a certain point where you didn't want now
the last one is a stop limit and this is essentially the same as a stop-loss or
just a regular stop the only difference is once it gets to that level that you
potentially want to buy or sell the system puts in a limit order so this is
actually you can change the limit order to whatever you want so if the market
traded up here one way you would use it is once it got up to this level you
would send in a limit order at that level to buy it now that would just you
know reduce the slippage that you're gonna get but because it's a limit order
if the market just blew past that level without your order getting filled you do
run the risk of actually not getting filled at that price and having the
market leave without you so sometimes in a rapid moving market you do want to
have those market orders instead of the limit orders with running the risk of
just having a little bit of slippage but you don't run the risk of not getting
into the trade another way you can use this though because it's a limit order
you can have the market hit this level up here and it can put in a limit order
at a different price so if you think that this price is a resistance level
but once the market gets there you want to get in at some lower price because it
confirms some kind of strategy for you or some kind of trend you can set in a
limit order at a price down here so the idea is the market gets up to this level
you like the stock that point but you want to buy it at a
lower price you can wait for the market to come back down to this level and then
that's when you would actually buy it and then hopefully the market would
bounce off of this level kind of and then you would have a potential
profitable trade from there and then of course on the flip side you can use this
to get out of a trade as well or even short-term market once the market comes
down and hits your stop you can have a limit order wherever you want so you can
have it again at this price of where your stop was or up here where maybe you
think the markets gonna have a quick rebound to or even down here at some
price where you would really want to get out of the trade you can just use it any
way you want now to give a quick recap of all the types we just went over a
market order gets you in right at the exact price of the market but again you
can get some slippage a limit order allows you to buy at whatever price you
designate so you can buy it at the current market if you want to get in
right now but it doesn't have that slippage issue but you might have some
fill issues if the market is moving quickly but you can also use it to buy
when the market maybe has a pull back and then a stop allows you to buy when
the market gets at a certain price so if the market moves up to a certain price
you can have it send in a market order and you can get filled in right away
when the market gets to that price or you can use it to sell when the market
hits a area that you want to get out of in a trade and then we have a stop limit
which allows you to pretty much do the same as a stop order or a stop-loss
order the only thing is once it gets to that price that you want to sell you can
change it to a limit order and just change it around where you actually want
to get filled or that trade a thanks for chat on this video if you want to learn
more about the thinkorswim platform and different order types in the thinkorswim
platform make sure to check out my other videos on the thinkorswim platform now
if you want to just learn more about trading and the stock market in general
make sure to subscribe to the channel if any questions feel free to ask them in
the comments below