Execution Mechanics
Execution Precision
10 min read
Master limit orders, market orders, and hybrid fills to choose the right order type that preserves your edge.
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10 min read
Master limit orders, market orders, and hybrid fills to choose the right order type that preserves your edge.
The trade is valid — now how do you get in? The order type you use can make or break your edge.
Prereq: Order Book Foundations, Timing the Entry. Next: Candle Structure (what you're firing at) and Executing From POI vs Into POI (where).
You’ve planned the setup. You’ve waited for confirmation. Now comes the last decision before risk hits your account:
“Do I enter with a limit, a market, or something in between?”
How you enter is as important as where — because order type affects:
Let’s break them down. (If the order book itself is fuzzy, read Order Book Foundations first; if you're not sure when to fire, Timing the Entry is the prerequisite. After this, Candle Structure tells you what you're firing at.)
Treat slippage and fees as a recurring negative R per trade. Over 200 trades, 1.5 bps of avoidable taker fee plus 3 bps of avoidable slippage compounds to a real fraction of your edge — measure it.
1.5 bps avoidable taker fee plus 3 bps avoidable slippage, compounded over 200 trades. That is roughly 4.5 bps per trade times 200 trades, eating a real fraction of capital deployed before your thesis even shows up.
| Order type | Fill guarantee | Slippage | Fee side | Default use |
|---|---|---|---|---|
| Market | Yes, immediate | Uncapped (walks book) | Taker | Late confirmation, must-fill |
| Limit | Only if touched | Zero on price; non-fill cost | Maker (post-only) | Passive entries at POI |
| Marketable limit | Immediate if depth exists | Capped to your limit | Taker | Most retail entries |
| Stop-market | Yes after trigger | Uncapped after trigger | Taker | Stops on perps |
| Stop-limit | Only if limit fills | Capped, may not fill | Either | Precision breakouts |
| IOC | Partial allowed | Capped | Either | Slice into thin books |
| FOK | All-or-nothing | Capped | Either | Block size, no legs |
You set a fixed price — and wait to be filled only if price touches or passes it.
| Pros | Cons |
|---|---|
| Best fill price, zero slippage | No fill if price misses (adverse-selection cost — you mostly fill when you're wrong) |
| Pays maker fee / earns rebate (with post-only) | Queue position matters; can be front-run |
| Emotionally detached | Requires anticipation |
A marketable limit — a limit placed at or one tick through the touch — fills immediately if liquidity is there, but caps your worst price. It's the workhorse hybrid: market-like fill probability with limit-like slippage control.
Use for:
You accept the best available price immediately.
| Pros | Cons |
|---|---|
| Guaranteed fill | Slippage risk (esp. volatile) |
| Best for fast reaction | Emotionally reactive if rushed |
| Good in breakouts | Requires confirmation confidence |
Use for:
Why market orders slip. A market order crosses the spread, then walks the book — it consumes the best ask, then the next, then the next, until your size is filled. If you send 10 BTC into a book where the top-of-book ask is 0.5 BTC, you pay every level in between. On a thin book during a liquidation cascade the resting liquidity also pulls as you arrive. That's how you get filled 50 ticks above your screen price.
Price must reach a certain level first, then your order becomes active.
| Stop Type | Use Case |
|---|---|
| Stop-Market | Breakout entries, liquidity reclaims |
| Stop-Limit | Precision breakout, capped slippage |
Watch out for:
These combine logic and discretion:
Book conditions decide the order type, not the chart pattern.
| Condition | Default order type |
|---|---|
| Spread wider than 2 ticks, deep book, you have time | Post-only limit at POI |
| Confirmed BOS, you need the fill, top-of-book depth at least 2x your size | Marketable limit (limit at touch plus 1 tick) |
| Stop-out on perp | Stop-market, reduce-only, mark-price trigger |
| Take-profit at known liquidity | Limit, reduce-only, post-only |
| Thin book (top-of-book smaller than your size) | Never market - ladder limits or pass |
FOMO + no plan = chasing entries. Execution should be pre-defined, not reactive.
Scenario:
Your execution plan:
This is not “gut feel” — it’s layered execution logic.
You're not 'paying the spread' - you're paying every level the book has. Use a marketable limit with a slippage cap.
During a fast move the trigger fires, your order walks the book, and you fill far past your stop. A pre-defined stop-limit with a sane band, or a wider mental stop, beats catastrophic fills.
A single 5-tick wick can knock you out of a position the index never moved. Default to mark-price triggers on perps.
Execution isn’t about being fast — it’s about being specific.
Choose the right order type for the context, not the emotion.
Pick the order type from the book conditions, not the chart pattern. Spread, depth, and trigger source decide which flag goes on the ticket — your thesis only decides whether to send it at all.
A limit order specifies a price and waits; a market order specifies size and accepts whatever price the book gives.
Stop-market when fill certainty matters more than price (stops on perps). Stop-limit when capped slippage matters more than fill (precision breakouts on liquid books).
Rejects the order if it would take liquidity, guaranteeing maker-side execution and the maker fee/rebate.
It forces the order to only shrink the position, never flip it. Without it, an over-sized stop on a perp can leave you in the opposite position.
Default to mark-price on perps — last-price is spoofable on thin books.