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METATRADER 5 PLATFORM:
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Types of Orders | MetaTrader 5 (MT5)
MetaTrader 5, or MT5, is a popular trading platform used by forex traders worldwide. The platform allows control to manage and open trade positions. Orders are divided into two main types: market and pending. Besides them there are “Stop Loss” and “Take Profit” orders.
Select an order type below to learn more:
Market Orders
This is the most straightforward type of order. A market order is an order to buy or sell a currency (or other traded asset) at the current market price. As long as there are willing buyers and sellers, a market order will be filled. The trade is executed immediately at the best available price.
Pending Orders
These are orders that you set up to trigger at a future price level. They are instructions to your trading platform to buy or sell a currency when it reaches a certain price level.
The four main types of pending orders are Buy Limit, Sell Limit, Buy Stop, and Sell Stop, and there are also combined types like Buy Stop Limit and Sell Stop Limit.
Select a Pending Order Type below to learn more:
• BUY LIMIT | PENDING ORDER:
This is an order to buy an asset at a price that is lower than the current market price. Traders use this when they anticipate that the price of an asset will fall to a certain level before rising again.
For example, if a currency pair is currently trading at 1.20000, and you think it will go down to 1.19000 before going back up, you can place a Buy Limit order at 1.19000.
This is like telling your trading platform, “If the price drops to a certain level or lower, buy this for me.” You use this when you believe that once the price falls to a certain point, it will start going up again.
• SELL LIMIT | PENDING ORDER:
This is the opposite of a Buy Limit order. It is an order to sell an asset at a price higher than the current market price. If you think the price will rise to a certain level before falling, you would place a Sell Limit order.
For example, if a currency pair is trading at 1.20000 and you think it will rise to 1.21000 before going down, you can place a Sell Limit order at 1.21000.
This is like saying, “If the price goes up to a certain level or higher, sell this for me.” You use this when you think that once the price hits a certain point, it will start going down.
• BUY STOP | PENDING ORDER:
This is an order to buy an asset at a price higher than the current market price. Traders use this when they anticipate the price will continue to rise after it reaches a certain level.
For example, if a currency pair is trading at 1.20000, and you think it will rise further after it hits 1.21000, you can place a Buy Stop order at 1.21000.
This order says, “If the price goes up to a certain level or higher, buy this for me.” It’s different from Buy Limit because you’re waiting for the price to rise before buying. You’d use this when you think that once the price rises to a certain point, it will keep going up.
• SELL STOP | PENDING ORDER:
This is the opposite of a Buy Stop order. It is an order to sell an asset at a price lower than the current market price. If you think the price will continue to fall after it hits a certain level, you would place a Sell Stop order.
For example, if a currency pair is trading at 1.20000 and you think it will fall further after it hits 1.19000, you can place a Sell Stop order at 1.19000.
• BUY STOP LIMIT | PENDING ORDER:
This is a combination of a Buy Stop order and a Buy Limit order. You set two prices: the stop price, which triggers your order, and the limit price, which is the highest price you’re willing to pay. If the market price reaches the stop price, a Buy Limit order is placed at the limit price. This is used when you expect the price to rebound after reaching a specific level above the current price.
It’s like saying, “When the price reaches a higher level, I want to place a Buy Limit order at a lower level.” So, first, the price needs to reach a higher point, then if it drops to your limit level, your platform will buy for you.
• SELL STOP LIMIT | PENDING ORDER:
This is the opposite of a Buy Stop Limit order. You set two prices: the stop price and the limit price. If the market price reaches your stop price, a Sell Limit order is placed at your limit price. This is used when you expect the price to rebound after reaching a specific level below the current price.
Essentially this is a mixture of Sell Stop and Sell Limit. It’s like saying, “When the price reaches a lower level, I want to place a Sell Limit order at a higher level.” So, the price needs to drop first, then if it goes up to your limit level, your platform will sell for you.
Take Profit
This is an order to lock in your profits. You set a Take Profit order at a specific price level above or below the current price. If you’re long or buying a currency (you’ve bought it expecting the price to rise), you set the Take Profit above the current price. If you’re short or selling (you’ve sold it expecting the price to fall), you set it below the current price. When the market hits this level, your trade is automatically closed, and your profit is locked in.
Stop Loss
This is an order to limit your losses. It’s the opposite of a Take Profit. You set a Stop Loss order at a specific price level. If you’re long or buying a currency, you set the Stop Loss below the current price. If you’re short or selling, you set it above the current price. If the market hits this level, your trade is automatically closed, and your loss is limited.
Remember, these orders help you trade without constantly watching the market, but they don’t guarantee profits. It’s crucial to develop a good understanding of market trends and dynamics, and to have a solid risk management strategy in place.
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