Types of orders

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On this MT4 tutorial we look at the four types of orders found on MT4 trading platform. These orders can be confusing, especially to novice traders.

If you’re serious about becoming a forex  trader you  must first learn how to use your trading platform to avoid making unnecessary mistakes.

The following two orders are used in the financial market and you  must understand them.

1. Market order

Types of orders

Market order is a commitment to the brokerage company to buy or sell a currencies at the current price. Execution of this order results in opening of a trade position.

market order is a buy or a sell order that is executed immediately at the current price.

For example , if audusd  current price is 0.7050 and you press the “sell by market” button, your order would then be instantly executed immediately at that level. The opposite is also true, if want to buy audusd at 0.7050 you would then press the ” buy by market” button as shown above.

2. Pending order

Pending order is the client’s commitment to the brokerage company to buy or sell a currency pair at a pre-defined price in the future. This type of orders is used for opening of a trade position provided the future quotes reach the pre-defined level.

How to place a pending order

Under pending orders there are 4 types of orders namely: Buy limit, Sell limit, buy stop, and sell stop.

1.  Buy limit order

A buy limit is a pending order placed above the market price.

Types of orders

For example, audusd  is currently trading at 0.7050 and you want to buy it once it reaches 0.7010.

You can either choose to sit in front on you screen and monitor your chart or price until it reaches the 0.7010 level then use “buy by market” option.

or if you have other things to do or you don’t like monitoring your charts, you can set a buy limit order at 0.7010 then walk away from your screen and let me market do it’s job.

If price move down and hit that 0.5010 level, your pending order will automatically be executed.

2.  Sell limit order

A sell limit is a pending order placed bellow the market price.

Types of orders

For example, audusd is currently trading at 0.7050 and you want to sell it once it reaches 0.7060

You can either choose to sit in front on you screen and monitor your chart until it reaches the 0.7060 level then use “sell by market” option.

or you can simply place a buy limit order at 0.7060, If price move up and hit the 0.7060 level, your pending order will be executed automatically.

3.  Buy stop Order

A buy stop order is a pending order place above the market price in the anticipated that the price will  move up, hit your pending order to activate it and continue to move upward after hitting your buy stop order.

Types of orders

For example, audusd is currently trading at 0.7050 and is heading upward. If you think price will continue to move up till 0.7060 level and still continue to move up 0.7060, you would then set a buy stop order at  0.7060 if you don’t want to baby sit your charts.

If price move up to 0.7060 level, your pending buy stop order will be activated automatically.

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4.  Sell stop order

A sell stop order is a pending order placed below the market price in the anticipated that the price will  move downward, hit your pending order to activate it and continue to move in the same direction after  after hitting your buy stop order.

Types of orders

For example, audusd is currently trading at 0.7050 and is heading down . If you think price will fall to 0.7040 level and still continue to fall after hitting 0.7040, you would then set a sell stop order at  0.7040.

If price move from 0.7050 level to 0.7040 your pending sell stop order will be activated automatically . Simple as that.

There you go: types of orders found on your MT4 platform.

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