Limit vs Market Orders – When To Use Which
Every futures trader uses these two order types, but most don’t actually understand the trade-offs. Here’s the real difference and when you should use each one.
What a Market Order Actually Does
A market order says: “Fill me right now at the best available price.” Execution is guaranteed. Price is not.
When you hit market buy, you take whatever sell orders are sitting on the ask. When you market sell, you hit the bids.
Market Orders Are Best For:
- Getting into a fast-moving setup immediately
- Exiting a losing trade right away
- Small size (1–4 lots) where slippage is minor
- When spread = 1 tick (most of ES/NQ/MES during RTH)
Market Order Downsides
- You can get slipped multiple ticks in low liquidity
- News spikes can blow straight past your intended level
- Larger size = more slippage
What a Limit Order Actually Does
A limit order says: “Fill me, but only at this price or better.” Price is guaranteed. Execution is not.
If price tags your limit order but size doesn’t trade through it, you won’t be filled. That’s the “queue.”
Limit Orders Are Best For:
- Entries where exact price matters
- High volatility markets with big spread or fast candles
- Scaling into positions
- Trading levels (FVGs, liquidity zones, VWAP re-tests)
Limit Order Downsides
- Not guaranteed to fill even if price hits your level
- You can miss an entire move waiting for the “perfect” price
- You may get partial fills on certain platforms
So Which Should You Use?
Use Market When:
- You need to get in or out **now**
- You’re trading small size
- Spread is 1 tick and liquidity is strong
- You’re stopping out of a losing position
Use Limit When:
- You want price precision
- You’re entering a level and expecting a reaction
- Liquidity is thin or volatile
- You’re scaling into a swing or scalp
The Real Rule Traders Use
Market to exit. Limit to enter. Not always, but it’s the cleanest rule of thumb for beginners.