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How to use different order types!

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Invest With Cici wrote a column · Mar 17, 2023 17:07
How to use different order types!
In addition to the basic order types Market Order and Limit Order, there are three other advanced order types in moomoo. This post is to explain how to use different order types.
Basic Orders
Basic orders are easy to understand.
➤ Market Order means the order is placed at whatever the market price is at the time of placing it. The advantage is that it can be filled quickly. The disadvantage is that there is a possibility that the transaction is not your ideal price. And since the market may fluctuate dramatically when you place an order, to guarantee a transaction, placing a market order requires that the account's buying power > 1.5x the market price.
➤ Limit Order means only that price can be filled, so you need to set a price. The advantage is that the transaction price must be your ideal price. The disadvantage is that it is not always possible to close quickly.
How to use different order types!

Advanced Orders
On top of these two types of orders, moomoo offers three more advanced orders to meet different buy/sell needs. The purpose is to help you save time, stop-loss and take-profit and get better returns.
➤ Stop Order (Stop Market Order and Stop Limited Order)
📖 Refers to: without watching the market, when the price reaches the trigger price you set, a current price / market order is automatically submitted.
🥰Benefits: When we are not watching the market when the market suddenly goes lower, it can help us to stop loss in time. And the trigger price is to help us determine if it has broken through my expected value, and any further drop is unbearable.
📝Practical example: Cici buys 100 shares of x stock at $70, but I am worried that x stock will start to fall for various reasons after I buy it. Then, in order to lose less, I decide to place a stop-loss order with a touch price of $65 and a stop-loss limit order with a price of $64.9. Then when stock x drops to $65, the system automatically submits a sell limit order to the market at $64.9 to control our risk.
➤ If-Touch Order (Market If-Touch and Limited If-Touch)
Also known as take profit order, with stop loss in the opposite direction, to help us lock in profits.
The same benefit is that when I have expectations of earnings, while the market suddenly surged, in the non-watching time to help me lock in profits.
➤ Trailing Stop Orders (Trailing Stop Market Orders and Trailing Stop Limited Orders)
This one is slightly more complicated. Stops and If-touches are orders that we have a clear strategy to operate. But when we do not have a clear strategy, trailing stop orders are good to help us make more and lose fewer types of orders.
📖Refers to: The so-called tracking is to track the stock price. Under the tracking, we need to set the tracking ratio, meaning that when the stock price from the high point back down to the ratio you set, the system will automatically submit a market order / limit order.
📝Practical example: Cici bought stock x at a price of 120, and I set the tracking ratio of 10%, then when the stock falls 10% directly to 108, it will hit the trigger price switch. At this time, it will be sold, controlling losses. But after the stock goes all the way up, then our touch price will keep refreshing as the stock rises.
For example, up to 130, our touch price also refreshed to 117, up to 140, our touch price refreshed to 126, once the stock price turns down to 10%, such as up to 140 after the start of the decline to touch 126, it will immediately trigger the submission of a trailing stop limit / market price single, to lock profit.
How to use different order types!

🙋‍♂️More questions
Q: How to understand that trigger price - spread
A: Here it can be understood as a price limit. This limit price = trigger price - the spread you specify. For example, the tracking percentage is 8% and the spread is 2. An 8% drop from the high point will automatically submit a limit order with a $2 spread from the current market price.


Q: When is this trailing stop limit most apply?
A: Some would argue that the drop is too strong and may bounce back, so if the loss is something you can’t anticipate, you might as well keep waiting. Advanced orders are meant to provide more options to traders with different mindsets. Everyone can use it flexibly.

Feel free to let me know your other questions about the orders.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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