What is a trigger order?

In fast-moving markets, the difference between capturing an opportunity and missing it often comes down to timing. That’s where Trigger orders (known traditionally as buy stops) come into play.

A trigger order is an order that allows the trader to set a target price that must be reached before a limit or market order will be executed.

Whether you’re chasing a breakout or managing risk, these strategic orders give you the ability to enter the market with precision once specific price levels are hit.

Here’s everything you need to know about Trigger orders: what they are, how they work, and when to use them in your trading strategy.

What Is a Trigger Order?

A Trigger order is a type of order to buy an asset once its price reaches a specified level above the current market price. It “triggers” only when the market moves in the direction you anticipate, helping you confirm momentum before entering a trade.

This is especially useful in volatile markets or breakout scenarios, where waiting for confirmation can protect you from false signals or premature entries.

Example: If Bitcoin is trading at (say) $100,000 and you believe a breakout will occur above $105,000, you can place a Trigger order at $105,000. Your buy order will activate only if the market reaches that level, indicating upward momentum.

Why Use a Trigger Order?

Trigger orders can serve multiple purposes, depending on your strategy:

Breakout Trading

Trigger orders are especially powerful tools for breakout trading strategies, whether you're going long on an upside breakout or short on a downside breakdown.

• Upward Breakouts: Use Trigger orders to buy once the price pushes above a key resistance level. This confirms upward momentum and ensures you're not entering prematurely. You avoid guessing and instead act only when the market shows real strength.

• Downward Breakouts (Short Trades): Trigger orders can also be used to enter short positions when the price falls below a significant support level. This approach helps you capitalize on downside momentum and catch early moves in bearish trends—without needing to constantly monitor the chart.

By setting your Trigger orders just above resistance (for longs) or below support (for shorts), you let the market prove your thesis before your trade is activated. This reduces false entries, improves discipline, and aligns your strategy with real-time price action.

Trend Confirmation

Rather than guessing market direction, Trigger orders let the price action prove your thesis. If the trigger isn’t hit, the trade doesn’t happen, saving you from unnecessary exposure.

For perpetual swaps and futures contracts, you'll be able to choose to trigger using either the last, mark or index price.

• Last price: The most recent transaction price.

• Mark price: The reference price of a derivative that is calculated from the underlying index, often calculated as a weighted index spot price of an asset across multiple exchanges. This avoids price manipulation by a single exchange.

• Index price: The average price across major spot exchanges.

Trigger order example: If the current market price is $100, a trigger order with a trigger price at $110 will be triggered when the market price rises to $110, placing the corresponding market or limit order.

Automated Entry

Markets move fast. A Trigger order automates your entry, so you don’t need to monitor charts 24/7.

How Trigger Orders Work

There are typically two components in a Trigger order:

• Trigger Price: The level at which the order becomes active.

• Execution Price: The price you’re willing to buy the asset at once the trigger is hit. This can be a market order (executes immediately at the best available price) or a limit order (executes only at your set price or better).

When to Use Trigger Orders

Here are some common scenarios where Trigger orders shine:

Things to Watch Out For

While Trigger orders are powerful, they come with a few caveats:

• Slippage: If you use a market order after the trigger, you may not get your ideal execution price in fast markets.

• False breakouts: Price may hit your trigger level and reverse, so it’s important to combine Trigger orders with solid technical analysis.

• Overtrading: Too many Trigger orders without clear rationale can clutter your strategy.

Takeaways

Trigger orders are a smart tool for entering trades with confirmation, especially in breakout or momentum-driven markets. By replacing guesswork with automation, they can help you act decisively without constantly watching price charts.

If you’re looking to level up your strategy, consider how Trigger orders can give you better control over when and how you enter the market, so you can trade with clarity, not emotion.

Tip: On our platform, you’ll find “Trigger” as an order type alongside market and limit. Use it to plan your trades with discipline and precision.