Orders' Types

Starting
to trade

Orders are the trades you place on the market. For example, a buy order or a sell order. However, the market offers a wide variety of options to open or close operations, you can place orders at market price, keep pending orders, establish take profit or limit loss orders and much more.

Market
Orders

A market order is one that is executed either to buy or sell at the current market price.

For example, if the price of the EUR/USD is at 1.2140 and you want to buy at that price, you only need to place the buy order in your trading platform and the purchase will be executed instantly at the market price.

Pending
Orders

Pending orders, unlike market orders, are not executed at the current price, pending orders are sent to the trading platform to be executed at future buy or sell prices under specific conditions.

There are several types of pending orders and we will see some examples in this section of the course.

Types of Pending
Orders

In a MT4 platform there are a total of 4 types of pending orders available, these are:

1

Buy Limit

It is an order that is executed at the ASK price. In this type of order, the price of the order is below the current market price.

Why is this happening? Because Buy Limit orders are used when it is considered that the price of a financial instrument will fall to a certain level and then start to rise. This way you can take advantage of a potential future upside by buying at a price lower than the current price.

2

Buy Stop

It is an order that is executed at the ASK price. In this type of order, the order price is above the current market price.

Why is this happening? Because Buy Stop orders are used when it is considered that the price of a financial instrument will have a solid upward trend for some time.

3

Sell Limit

It is an order that is executed at the BID price. In this type of order the current market price is lower than the price at which the order is set.

Why is this happening? Because Sell Limit orders are used when it is considered that the price of a financial instrument will rise to a certain level and then begin to fall.

4

Sell Stop

It is an order that is executed at the BID price. In this type of order, the current market price is higher than the price at which the order is set.

Why is this happening? Because Sell Stop orders are used when the price of a financial instrument is expected to fall to a certain level and then continue to fall.

Take Profit Order

The Take Profit order is used to obtain profits when the price of a financial instrument has reached a certain level. This order generates the automatic closing of the operation in order to take the profits generated up to said price level.

Take Profit orders accompany market or pending orders.

How is the Take Profit used?

When you go long or buy, the Take Profit is set at a price above the current market price, when you go short or sell, the Take Profit is set at a price below the current market price.

How is Stop Loss used?

When you go long or buy, the Stop Loss is set at a price below the current market price, when you go short or sell, the Stop Loss is set at a price above the current market price.

Stop Loss Order

The Stop Loss order serves to limit your losses when the price of a financial instrument has reached a certain level. This order generates the automatic closing of the operation in order to reduce the losses generated up to said price level.

Stop Loss orders accompany market or pending orders.