I used to make most of my stock trades as market orders. This meant that the broker just executed my buy or sell order at the best available price right away. However, I now make limit orders exclusively to avoid getting burned by unusual market conditions.
The exact price on stock trades isn’t as important for buy-and-hold investors as it is for high-speed traders. A few cents per share spread over a decade holding period isn’t a big deal. However, unusual market conditions can lead to surprises.
To use a concrete example, if you place a market order to sell 200 shares of VCE when its spread is $24.87 to $24.88, you expect to get $24.87 per share. However, this is not guaranteed. If there is a sudden change in the market, you could end up getting less. How much less depends on how violently the market shifts.
A simple remedy is to place a limit sell order at, say $24.85. You are still very likely to get $24.87 per share, and you are guaranteed not to get any less than $24.85. The exact price to choose for the limit is the lowest price you are willing to accept if there is a sudden shift in the market.
My excuse for getting into the habit of making market orders is that it used to cost me $25 per market order trade and $29 for a limit order trade. Now that I pay about $10 per trade and there is no extra cost for a limit order, I no longer have any reason for using market orders.
I still sometimes forget to include a limit with my orders, but an article about “hide-not-slide” orders reinforced for me the lengths active traders will go to take money from each other. I can’t say that I fully understand the purpose of these hide-not-slide orders, but they have helped me to remember to protect myself with limit orders.