Order Types

Market Execution:

Market execution is available for MT4, MT5 and ActivTrader accounts. With this execution mode, the order gets filled at the best available price. Sending the order in such mode means advance consent to its execution at this price.

Pending Order:

Pending order is the client’s commitment to the brokerage company to buy or sell a security at a pre-defined price in the future. This type of order is used for the opening of a trade position provided the future quotes reach the pre-defined level. There are four types of pending orders available in the terminal:

Buy Limit :

buy_limitA Buy Limit is a pending buy order placed below the market price. Orders of this type are usually placed in anticipation of the security price, having fallen to a certain level, will increase.

Example: If EURUSD quotes 1.3850/52, an example of buy limit would be 1.3800 In this case, if EURUSD ASK price reaches 1.3800 then you will be long EURUSD.

 

Sell Limit :

sell_limitA Sell Limit is a pending sell order placed above the market price. Orders of this type are usually placed in anticipation of the security price falling, after having increased to a certain level.

Example: If EURUSD quotes 1.3850/52, an example of sell limit would be 1.3900 In this case, if EURUSD BID price reaches 1.3900 then you will be short EURUSD.

 

Buy Stop:

buy_stop

 

A Buy Stop is a pending buy order placed above market price. Orders of this type are usually placed in anticipation of the security price, having reached a certain level, will keep on increasing.

Example: If EURUSD quotes 1.3850/52, an example of buy stop would be 1.3900 In this case, if EURUSD ASK price reaches 1.3900 then you will be long EURUSD.

 

Sell Stop:

sell_stopA Sell Stop is a pending sell order placed below market price. Orders of this type are usually placed in anticipation of the security price, having reached a certain level, will keep on falling.

Example: If EURUSD quotes 1.3850/52, an example of sell stop would be 1.3800 In this case, if EURUSD BID price reaches 1.3800 then you will be short EURUSD.

 

Buy Stop Limit (MT5):

buy_stop_limit
Stop Limit combines features of a Buy Stop order and a Buy Limit order. As soon as the ASK price reaches the price target indicated in the order window, a Buy Limit order will be placed at the level specified in the order window.
Example: If EURUSD quotes 1.3550/52, an example of Buy Stop Limit would be to target 1.3900 with a Buy Limit at 1.3800. If EURUSD Ask price reaches 1.3900 then a Buy Limit order will be placed at 1.3800.

 

 

Sell Stop Limit (MT5):

sell_stop_limit

Sell Stop Limit combines features of a Sell Stop order and a Sell Limit. As soon as the Bid price reaches the price target indicated in the order window, a Sell Limit order will be placed at the level specified in the order window.

Example: If EURUSD quotes 1.3550/52, an example of Sell Stop Limit would be to target 1.3200 with a Sell Limit at 1.3300. If EURUSD Bid price reaches 1.3200 then a Sell Limit order will be placed at 1.3300.

 

Stop Loss:

This order is used for minimising of losses if the security price has started to move in an unprofitable direction. If the security price reaches this level, the position will be closed automatically. Such orders are always connected to an open position or a pending order. The brokerage company can place them only together with a market or a pending order. Terminal checks long positions with BID price for meeting of these order provisions, and it does with ASK price for short positions.

Example 1: If you bought EURUSD at 1.3850, an example of stop loss would be 1.3800. If EURUSD BID price reaches 1.3800 your position will be automatically closed.

Example 2: If you sold EURUSD at 1.3850, an example of stop loss would be 1.3900. If EURUSD ASK price reaches 1.3900 your position will be automatically closed.

Please note: the price stipulated into the stop order is the price at which the order becomes activated. Once this price is reached, this triggers a market order. This means that when the market is experiencing a high volatility (i.e. following the release of macroeconomic news) or poor liquidity phase, prices could “jump” or move discontinuously and your stop level therefore cannot be guaranteed.

Example: you have a long position on EURUSD with your Stop Loss at 1.4281 and the current market price is 1.4285. If following a release of a macroeconomic news (i.e. non-farm) the price would “jump” from 1.4285 to 1.4274 (overcoming your stop level), your order will be executed at the next trading level available, in this case: 1.4274

Stop Loss is intended for reducing of losses where the symbol price moves in an unprofitable direction. If the position becomes profitable, Stop Loss can be manually shifted to a break-even level. To automate this process, Trailing Stop was created. As soon as profit in points becomes equal to or higher than the specified level, command to place the Stop Loss order will be given automatically. Therefore if price changes in the more profitable direction, trailing stop will make the Stop Loss level follow the price automatically, but if profitability of the position falls, the order will not be modified anymore.

Please note that trailing Stop works in the client terminal, not in the server (like Stop Loss or Take Profit). This is why it will not work, unlike the above orders, if the terminal is off.

The above pictures are taken from built-in help of MetaTrader 4 Platform