Trade Methods

Learn how to trade Market, Limit, Trigger, and Condition

Market

Market order (Limit) is a method where you instruct the brokerage to buy (or sell) at the current market price, without specifying the price. This is typically used when you want to execute a trade quickly and with certainty. For a sell order, it will be executed at the highest available bid price, and for a buy order, it will be executed at the lowest available ask price. For example, if there are sell limit orders at 850 yen, 990 yen, and 1,130 yen, and you place a buy market order, it will be executed at the lowest price, 850 yen.

Advantages of Market Orders

The advantage of a market order is the speed at which the transaction is completed (execution). Since the market order prioritizes speed over price, it is executed faster than limit orders. If you place a buy market order, you can quickly obtain the desired stock. Similarly, a sell market order allows you to sell quickly if you want to dispose of a stock.

Disadvantages of Market Orders

The downside is that you may end up buying (or selling) at a price higher (or lower) than expected. For instance, even if you think that around 500 yen is an affordable price, a surge in buy orders might push the price up, forcing you to buy at 550 yen per share. This risk is particularly higher when market prices fluctuate greatly or when trading low-volume stocks, as the price can deviate from your expectations.

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Limit & Conditional 

When placing a sell order, it will be executed when the price reaches or exceeds the specified amount; when placing a buy order, it will execute when the price falls below the specified amount. This is also known as a limit order, which allows you to set a price in advance without constantly watching charts or rates. It is particularly useful when you want to secure a better price than the current one.

For example, if the current exchange rate for USD/JPY is 110 yen, and you want to buy when it drops to 105 yen, you can place a limit buy order at 105 yen. When the rate reaches your specified price, the order will automatically execute.

Similarly, if the current USD/JPY rate is 110 yen and you want to sell when it rises to 115 yen, you can place a sell limit order at 115 yen. The system will automatically sell when the price reaches the specified rate.

Trigger

Trigger order is a type of order where both the order price and trigger condition are pre-set. Once the final price reaches the trigger price, the system places the order at the pre-set price. This allows you to manage trades automatically without constantly monitoring the market, ensuring that you can lock in profits or stop losses in advance.

Advantages of Trigger Orders

The benefits of trigger orders include:

1. Effective risk management
2. Capturing trends and taking positions accordingly
3. Reducing the risk of judgment errors

By setting a trigger price when placing a buy order, you can easily capture trends and avoid potential losses if the trend goes against your expectations.

Disadvantages of Trigger Orders

The downside of trigger orders is that while they offer significant risk mitigation, the trade will not execute unless the conditions are met. This makes them unsuitable for scalping (a short-term trading method). You should consider your trading style when deciding whether or not to use trigger orders.