An order is an instruction to the venue: what to buy or sell, how much, and under what conditions. On a swap interface you only ever meet one kind. On a perp DEX with an order book you meet five or six, plus a few checkboxes — and the checkboxes are where most expensive accidents happen.
Market orders: certainty of fill, not of price
A market order executes immediately against whatever is resting in the order book. You will get filled; you will not know the exact price until you do. On a liquid market like BTC or ETH the difference is tiny. On a thin market, or during a sharp move, a market order can walk through several price levels and fill worse than the number you saw on screen. Market orders also pay the taker side of the fee schedule, which is usually the higher one (Lesson 16).
Use it when getting out matters more than the exact price — closing a position that is going wrong, for instance.
Limit orders: your price, or no fill
A limit order says "buy at this price or better" and waits in the book until the market comes to it. You control the price; you give up certainty of execution. Say ETH trades at $2,010 and you place a limit buy at $2,000. If price dips to $2,000, you are filled at $2,000 or better. If it never dips, you own nothing. Resting limit orders typically pay the lower maker fee, and on some venues earn a rebate.
Use it for entries you are not in a hurry for, and for exits at a target price. Lesson 31 covered the spot version; on a perp DEX the mechanics are the same, just faster.
Stop orders: a trigger, then an order
A stop order does nothing until the market reaches a trigger price. Then it becomes either a market order (stop-market) or a limit order (stop-limit). Stops are how you leave a losing trade automatically instead of watching a screen.
The trade-off between the two is the same as above, and it bites hardest at the worst moment. Say you are long ETH from $2,000 with a stop-limit: trigger $1,950, limit $1,945. If price gaps straight from $1,960 to $1,930 on bad news, your limit at $1,945 is now above the market and may never fill — you are still long, below your stop. A stop-market would have filled around $1,930: worse than planned, but out. For a protective stop, most traders accept the worse price in exchange for actually exiting.
Also check which price triggers the stop. Venues usually offer the mark price, the last traded price, or an index; a stop on last price can be triggered by a single odd trade in a thin book.
Take-profit and stop-loss attached to a position
Most perp DEXes let you attach a take-profit (TP) and a stop-loss (SL) to a position when you open it, or afterwards from the position panel. Under the hood these are just stop or limit orders that close the position. The convenience is that they are tied to the position: if you close manually, the venue usually cancels them for you. If you set them as separate orders instead, they can outlive the position — see the next section.
Two settings that prevent expensive mistakes
- Reduce-only. Tells the venue this order may only shrink an existing position, never open or flip one. Say you are long 1 ETH and place a sell for 1.5 ETH as your exit. Without reduce-only, you close the long and are now short 0.5 ETH — a position you never meant to have. With reduce-only, the order fills for 1 ETH and the rest is cancelled. Turn it on for every exit order, every stop, every TP.
- Post-only. Tells the venue to place this limit order in the book only if it will rest as a maker; if it would fill immediately as a taker, cancel it instead. This protects you from paying the taker fee by accident when you mistype a price on the wrong side of the market.
Two more worth knowing: time in force settings (good-till-cancelled vs. immediate-or-cancel) decide how long an order lives, and TWAP or scale orders on some venues split a large order into pieces over time to reduce price impact.
Which order, when
| Situation | Order |
|---|---|
| Enter now, liquid market | Market, or a limit at the current price with post-only |
| Enter at a better price, no hurry | Limit, post-only |
| Protect a position against loss | Stop-market, reduce-only |
| Take profit at a target | Limit or TP, reduce-only |
| Get out now, whatever the price | Market, reduce-only |
Set the stop before you think about the target, and check the reduce-only box before you check anything else. Venues name and arrange these controls differently — Hyperliquid and Lighter are order-book venues where you will meet all of them; a pool-based venue such as GMX offers a smaller set. The next lesson turns these tools into a sizing framework.
- Placing an exit order without reduce-only and accidentally flipping from long to short.
- Using a stop-limit as a protective stop, then watching price gap through the limit without filling.
- Sending a market order into a thin market and filling far from the price shown on screen.
Written and reviewed by the dexwatch editorial team. Last updated 2026-09-22. Educational content, not financial advice. Spotted an error? Tell us.