Introduction to trading: how markets and orders work

1. The main markets at a glance

A market is any organized system where buy orders and sell orders meet. The price you see quoted is the last price a buyer and seller agreed on. Markets differ in what is traded, who oversees them, and when they are open, but the core machinery of bids, asks, and matched trades is shared across all of them.

You do not need to trade every market. Many beginners focus on one liquid market that offers small position sizes, such as micro index futures, and learn it well before branching out. What transfers between markets is the mechanics covered in the rest of this article; what does not transfer is each product’s own contract terms, hours, and costs.

• Stocks: shares of ownership in a company, traded on exchanges such as the NYSE and Nasdaq during set exchange hours.
• Futures: standardized exchange-traded contracts to buy or sell an underlying, such as a stock index, commodity, or interest rate, at an agreed price. The CFTC notes that most futures participants are commercial hedgers, with speculators attempting to profit from price changes.
• Forex: currency pairs such as EUR/USD, traded through a decentralized network of dealers rather than one central exchange.
• Crypto: digital assets traded on crypto venues, many of which run around the clock and vary widely in regulation and investor protection.

2. Buyers, sellers, and the bid, ask, and spread

At any moment, the bid is the highest price a buyer is currently advertising, and the ask (also called the offer) is the lowest price a seller is advertising. The gap between them is the spread. A market buy order pays the ask; a market sell order receives the bid. The spread is therefore an immediate, unavoidable cost of entering and exiting quickly, on top of commissions and fees. A DOM ladder, like the one built into Aeris, shows the live bid and ask with the displayed size at each price.

A concrete example: the Micro E-mini S&P 500 future (MES) has a minimum price move, called a tick, of 0.25 index points, worth $1.25 per contract. If the market shows a bid of 6,000.00 and an ask of 6,000.25, the spread is one tick. Buying and immediately selling at market would cost you that $1.25 per contract plus commissions, before the price moves at all. Small numbers, repeated across dozens of trades a day, become real money.

• Liquid markets: heavily traded contracts tend to hold tight spreads of a tick or two, with meaningful size displayed at each price.
• Thin markets: wider spreads and less depth make every entry and exit more expensive, and every stop more likely to fill at a worse price.
• The habit: check the spread and the visible depth before you trade, from day one.

3. The order types you will actually use

An order is an instruction about how to enter or exit, not just whether. Four order types cover almost everything a beginner needs, plus one combination that experienced traders rely on. The definitions below follow the SEC’s Investor.gov explanations.

• Market order: buy or sell immediately at the best available price. It guarantees execution but not the price, and in a fast market the fill can be worse than the last traded price you saw.
• Limit order: buy or sell at a specific price or better. A buy limit fills only at your price or lower, a sell limit at your price or higher. You control the price, but the market may never come to you and the order may not fill at all.
• Stop order: rests dormant until the market trades at your stop price, then becomes a market order. A sell stop below the market is the standard way to cap a loss on a long position; a buy stop above the market caps a loss on a short.
• Stop-limit order: like a stop, but it becomes a limit order instead of a market order when triggered. You keep price control, but if the market moves straight past your limit, you may not be filled and the loss can keep growing.
• Bracket or OCO order: an entry with two attached exits, a profit target and a stop, linked so that when one fills the other cancels (one-cancels-the-other). Your exit plan is in the market before you are.

4. Long, short, leverage, and margin

Going long means buying first and hoping to sell higher. Going short means selling first and hoping to buy back lower. In futures, shorting is as simple as going long: the contract is an agreement, not a piece of property you had to borrow, so you can sell it without owning it. The risk is symmetric. A long position loses when price falls; a short position loses when price rises, and a rising price has no ceiling.

Leverage is what makes futures both accessible and dangerous. Futures margin is a deposit you post with your broker to open a position; it is not a down payment, and you do not own the underlying. CME Group describes futures margin as typically 3% to 12% of the contract’s notional value, so a small deposit controls a large position. The exchange’s clearing house sets the level, it can rise when markets get volatile, and your broker can require more. The arithmetic deserves a slow look:

• Notional exposure: one MES contract at an index level of 6,000 controls $30,000 of exposure, because the contract pays $5 per index point.
• A 1% index move: 60 points, or $300 per contract, in either direction.
• On a $3,000 account: that ordinary daily move is a 10% swing in your equity. Scale up to ten contracts and the same 1% move decides whether the account survives the week.

5. What a trading platform actually does

A trading platform is the software layer between you and the market. It charts prices, displays the order book and recent trades, sends your orders to a broker, and tracks your position and profit and loss. The broker holds your account and margin and routes orders; the exchange matches them; a data feed streams the prices. These are separate roles that beginners often blur together, and keeping them straight helps when you compare costs or troubleshoot a problem. The CFTC warns that many individuals who speculate in futures lose all of their money, and can even be required to pay more than they invested initially, so the platform’s job is to make your exact exposure visible at all times.

When you compare platforms, check the things that matter at speed: reliable market data, an order ticket or chart trading you understand, attached stop-loss and take-profit orders, a depth-of-market display if you trade actively, and a simulated mode that behaves like live trading. If a platform shows specialized displays such as footprint charts, cumulative volume delta, or a DOM ladder, our order-flow glossary explains what each one actually measures.

6. Where Aeris fits

Aeris is a native desktop trading platform for Windows 10 or 11 and macOS on Apple silicon, built so you can learn every mechanic in this article on live market data before risking a dollar. The free plan costs $0 and needs no card; download Aeris to start on the simulated account, and the pricing page lists exactly what each plan includes.

• Real charts and a DOM: one workspace with up to 4 charts, 3 indicators per chart, drawing tools, a footprint chart, and the DOM ladder, so you can watch the bid, ask, and spread move in real time.
• Simulated trading with exits: chart trading with stop-loss and take-profit attached on a simulated account, so you can rehearse market, limit, stop, and bracket orders on live prices.
• Bar replay: practice trading through past sessions as if they were live, which compresses weeks of screen time into evenings.
• Live when you are ready: Hyperliquid crypto data is included free, and live futures trading runs through your own Rithmic account (one account on the free plan, with exchange data fees set by your firm or broker).