What is a market order?
"Market order" is a type of order in which the user executes a buy or sell order immediately at the best price in the current market for fast trading.
Assuming that the last price of BTC is 20,000 USDT. If a user wants to buy BTC at the market price immediately, they can choose the market order and set the amount (for example, 100 USDT). The market order will be filled immediately after placing the order.
Note: In a volatile market, the filled price of the market order may not necessarily be 20,000 USDT, but the real-time market price. It could be higher or lower than 20,000 USDT.
What is a limit order?
"Limit order" is a type of order in which the user sets the amount and the highest buy price or lowest sell price they can take. When the market price matches the user's expectation, the system will execute the order at the best price within the limit price range.
Assuming that the last price of BTC is 20,000 USDT. If a user wants to buy BTC at a lower price of 18,000 USDT, they can choose the limit order and set the buy price at 18,000 USDT. After placing the order, the limit order will be filled automatically when the price drops to less than or equal to 18,000 USDT.
What is the difference between the two?
Market Order: Users don't need to enter a price as the order will be executed immediately at the current market price against the counterparty.
Limit Order: Users need to enter a price at which they expect the order to be executed. The order will enter the order book and contribute liquidity, waiting for a matching counterparty order for execution.