Fred won't steer ya wrong, and I have to echo many of his statements.
Market orders do have a purpose. But they should be realized for what they are, and you should understand that going in - a Market Order is designed to let the 'market' dictate what price you receive.
In other words, you're going to get screwed.
This is how I usually explain the difference. Let's say you're haggling in a market / bizarre for a price on a piece of fruit. You want it for less money, the owner of the stall, obviously wants to sell it to you for more - right? We can all picture that in our minds. So what happens? You haggle. Back and forth. That's what the financial exchanges are all about. Haggling over price.
In a
Market Order, you're in effect telling the owner of the stall - "Within the prices that we've already discussed, you set the price for me"
He's obviously going to dictate the highest price he can get away with.
The same is true with a Market order.
Whatever the bid-ask spread is, you're going to get the worst side of that spread with a market order. But, you will be filled. That's the advantage. You can use a market order if the bid-ask spread is very 'tight'. You won't be screwed as badly - and you will be filled.
The advantage of a
Limit Order, is obviously that you get to absolutely dictate the price that you will be filled with. The disadvantage? Is that there is no guarantee that the exchange will fill the order. The market may not deem your price to be reasonable in the spread, and there will be no takers.
So it's a matter of 1) How tight is the bid-ask spread? 2) How badly do you want in a particular order 3) How much do you mind the market screwing you over on price?