When trading futures, what is the meaning of the different order types and what is the best strategy?

For instance there are STOP, Market, Limit and MOC orders what is that each of them mean and when should I use them.

Joe K // Apr 10, 2010 at 6:18 am

ohhh… careful… futures is one of the few places you can actually lose more than the amount you invested!

If you don’t know what these orders are, then I would advise that you trade stock for a while, to get used to them. Stocks are bad enough.. but futures are like stocks on crack & meth & whatever other drugs make you crazy!

anyway:

Stop: STOP! get me out! the price is going down and I want OUT ! ( so the price is 10 right now.. you put a Stop at 9, so that if it goes down to 5, you got out at 9! but as long as it’s above $9… you stay in, and make lots of cash)

Market: Slay me! take all my money, I don’t care! i want it NOW! ( Market orders say – I know what I want, I want it now, just give me the best price out there, I don’t care what the price is )

Limit: Wait! I know I want it… but c’mon, I don’t want to pay more than $12 for it! ( Limit orders say you’ll take it for $12 or less… but not a penny more )

MOC: forget it, don’t do it, this one is just plain dumb… worse than Market, this is Market On Close.. ( that means I want some, but wait until the market closes and then buy me some… I REALLY don’t give a hoot what it might cost me! )

Again: if you don’t know what these order types are… you need to trade stocks for a year and forget about Futures for now… or you’ll be forgetting about all the money you used to have…..

Good luck!

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