Someone has been asking me about placing orders, so today I’ll clarify the concept of trigger price, because many beginners tend to get it mixed up.

In futures or derivatives trading, the trigger price and the execution price you set are actually two completely different things. Many people confuse them, which leads to problems when placing orders.

The trigger price is the point you set to activate the order. When the market price reaches this point, your order will be triggered, but this doesn’t mean it will be executed at that price. For example, if you set the trigger price at 523, your order will only be triggered when the market price actually hits 523.

The actual price you want to execute at is another parameter. This is the target price at which your limit order will be filled. If you are buying, it’s the maximum price you’re willing to pay; if you are selling, it’s the minimum price you can accept. Using the previous example, if you also set the execution price at 523, it means that once the order is triggered, you hope to fill it at 523.

To sum up simply: the trigger price’s role is to activate your order, while the execution price is the actual price at which the order will attempt to fill. This conditional limit order setup is very common because it allows you to wait for specific market conditions. Once the trigger price is reached, the system will automatically place your order into the market.

Once you understand this logic, you won’t make mistakes when placing orders on any trading platform. Many people lose money because they don’t fully understand the concept of trigger price, which causes their orders not to execute as expected. So next time you place an order, remember to confirm what these two prices are, and don’t let the market miss your opportunity.