Market orders vs limit orders
| Order type | What it does | Use it when |
|---|---|---|
| Market order | Buys at the current price, immediately | Buying a liquid index fund or ETF -- simplest, fills instantly |
| Limit order | Buys only at a price you set or better | You want price control on a thin or volatile name; it may not fill |
When a market order is the right call
For a broad index fund or ETF, a market order is almost always fine -- the bid-ask spread is tiny and you are holding for decades, so a few cents does not matter. Limit orders earn their keep on illiquid or volatile single stocks, not on VTI.
Set up an automatic recurring buy
Link your bank, start an ACH transfer of an amount you won't need soon, and set up an automatic recurring buy of a total-market fund every payday. Then close the app.
Automating beats willpower
Which order type for a long-term buy
You want to buy a broad index ETF you'll hold for 20 years. Which order type is the simplest sensible choice?
Check your understanding
Sit with the ideas.
After funding your account, what is the single highest-impact habit for long-run returns?
Why: