Order types are instructions that traders use to buy or sell financial assets, such as stocks or currencies. The most common types include market orders, which execute immediately at the current market price, and limit orders, which set a specific price at which the trader wants to buy or sell. Another type is the stop order, which becomes a market order once a specified price is reached, helping to limit losses or protect profits. Understanding these order types is essential for effective trading strategies and managing risk in the financial markets.