How Does a ‘Limit Order’ Differ from a ‘Market Order’ in the Context of Preventing Slippage?

A market order is an instruction to buy or sell immediately at the best available current price, offering speed but accepting potential slippage, especially for large orders. A limit order, conversely, is an instruction to buy or sell at a specified price or better.

By setting a price limit, the trader ensures the order will only execute at or within their acceptable range, thereby eliminating negative slippage, though execution is not guaranteed.