Pending orders are some of the most useful tools that a forex trader has in their toolbox. They allow traders to take total control of their forex strategies, even when they are away from their trading terminals.
In our last post, we explored how pending orders work as set instructions, telling your broker to sell or buy an instrument under certain defined conditions.
We also explored two of the most basic forms of pending order; stop loss and take profit orders. In this post, we’re going to examine the four other key pending order types available on MetaTrader 4 — plus the two advanced pending order types on the Exness MetaTrader 5 platform.
Let’s dive in!
First Things First
There are two basic categories within which all six of the pending orders available on MetaTrader 4 fall into: limit orders and stop orders.
Limit orders where the trader’s set price is better than the current price.
What does that mean? Imagine that the price of a given currency pair is at 1.3400. You want to buy because your analysis suggest that the price will eventually rise past 1.3500 but you also believe the price will drop lower before it does so. Thus, you think that a great point to buy is 1.3200. A limit order will let you open a position at that better rate. Take profit orders are one example of limit orders.
Stop orders are orders where the current price is better than the trader’s price.
Imagine that a currency pair is currently sitting on 1.3400. You decide that if the price continues to increase, say to 1.3500, that the price will likely have broken out of a trend and continue rising. That means you decide that the best place to buy at is 1.3500. This would be a stop order.
- Buy limit: An order to buy a currency at a rate that is less than the current market price
- Sell limit: An order to sell a currency at a rate that is more than the current market price
- Take profit: An order placed onto existing orders in order to close that order once the price reaches a certain predefined level. These can be placed when making the original order, or added/changed/removed once the order is live.
- Buy stop: An order to buy a currency at a rate that is more than the current market price
- Sell stop: An order to sell a currency at a rate that is less than the current market price
- Stop loss: An order placed onto existing orders in order to close that order once the price moves a predefined distance in an unprofitable direction. These can be placed when making the original order, or added/changed/removed once the order is live.
With the MT4 terminal you can also place trailing stops, which move dynamically when the price trends in a profitable direction, and stop moving once it moves in the alternate direction. This is a way that traders can safeguard gains.
Unique MT5 Orders
With the MT5 platform, available for real and demo accounts on Exness, there are two additional pending order types that can be used: buy stop limit orders and sell stop limit orders. These effectively act first as stop orders, and then once the price hits a certain level they transform to limit orders. This allows for great precision when setting up a desired trade.
Ready to experiment with placing a pending order? Open an MT4 or MT5 account now!