Introduction of XM MT5's 6 Pending Order Types
Did you know that MT4 has only 4 pending order types and MT5 has 6 pending order types?
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XM has updated the maximum leverage to 1:1000 in June 2022.
Leverage 1:1000 does not apply to client registered under the EU regulated entity of the Group. The maximum leverage for Trading Point of Financial Instruments is 30:1.
MetaTrader 5 – Extra Order Types
You can trade your favourite assets using 2 order types on MT5 which are Market order and Pending order.
A market order is an order to buy or sell an asset at the current price. The order will be executed in real-time.
On the other hand, a pending order is an order to buy or sell an asset at a certain price in the future.
The XM MT5 platform has 6 pending order types as follows:
- Buy Stop
- An order to buy an asset at a higher price than the current price, in anticipation that when that price is achieved, the trend will continue higher.
- Sell Stop
- An order to sell an asset at a lower price than the current price, in anticipation that when that price is achieved, the trend will continue lower.
- Buy Limit
- An order to buy an asset at a lower price than the current price, in anticipation that the asset price will turn higher after having achieved a certain price.
- Sell Limit
- An order to sell an asset at a higher price than the current price, in anticipation that the asset price will turn lower after having achieved a certain price.
- Buy Stop Limit
- A combination of buy stop and buy limit orders designed to eliminate slippages. You set a buy stop limit at a price above the current asset price, and when achieved, a buy limit order will be placed.
- Sell Stop Limit
- A combination of sell stop and sell limit orders designed to eliminate slippages. You set a sell stop limit at a price below the current price, and when achieved, a sell limit order will be placed.
If you apply Stop Loss and Take Profit orders, your trade positions will be automatically closed when they are triggered. You can also manually close the positions at any time before these orders are triggered.
Forex trading operations, positions, orders and their types
The entire process of foreign exchange trading can be divided into two permanently alternating periods: “trading period” and “waiting period”. Because it is impossible for traders in the foreign exchange market to be buying and selling with others all the time (because each trading strategy has its best time to enter and exit the market). But this does not mean that traders should be idle during the “waiting period”, on the contrary, traders in the “waiting period” should focus on market analysis (see Chapters 2 and 3), and calculate and analyze their past trading process and results (correcting mistakes in one’s own trading).
Here we will describe the entire transaction process and each stage in the transaction in detail. Every buy and sell operation (or complete trade) with a currency contract involves the following steps:
- The trader sets an order (in order to submit the order, the trader needs to go through the electronic trading system of the Forex broker, the types of orders will be explained below);
- Forex brokers fulfill trade orders that have been set up correctly. If market trading conditions allow the order to be filled, the transaction will take place at this time;
- One or more of these transactions (also called opening or opening orders) become a client’s position in the market;
- Position prices have what is called “floating”;
- When an order is opened, traders can make some order modifications at any time;
- When closing an order, the operation of the order must be the opposite of that when opening a position;
- The result of closing the position will directly lead to the change of the balance, and the transaction process will be added to the history when the order is closed.
The order manipulation process just described is a perfect scenario, but in reality, we should take into account that not all order setups can be opened smoothly. There are also nuances in order execution in reality. In addition, if there is insufficient margin on the account to maintain the position, margin calls and liquidation will occur, and the liquidation may be executed at an unfavorable price, not in accordance with the requirements of the trader and the order. Fulfill the price. A detailed description of these situations will be explained to you in our company’s special course information.
General order types:
The foreign exchange market is actually an order that a trader gives a foreign exchange broker to execute at a suitable market price. In this way we can divide the classification of market orders:
- Market buy order (long position) – open a position at the market buy price (Ask);
- Market sell order (short position) – open a position at the market sell price (Bid);
- Market Closing Order – to close the position at the market price (long positions will be closed at the market selling price “Bid”; short positions will be closed at the market buying price “Ask”);
GTC (Pending Order) is a trading order that can only be implemented when certain conditions are met. There are several types of pending orders:
- Buy stop is a conditional long position order: if the future market buying price exceeds the buy limit price set by the trader (the buy limit price must be higher than the current market buy price) ), the buy stop order will be filled (at this time the trader expects the price to keep rising, so this is also called “trend buy”);
- Buy Limit is a conditional long position order: if the buying price of the future market falls below the buy stop price set by the trader (the buy stop price must be lower than the current one) the market bid price), the buy limit order will be filled. (At this time, traders expect the price to be close to the bottom and then rebound, so this is also called “bounce buy”);
- Sell stop is a conditional short position order: if the sell price in the future market falls below the sell limit price set by the trader (the sell limit price must be lower than the current market sell price) bid), the sell stop order will be filled. (Traders at this time expect the price to keep falling, so this is also called “trend selling”);
- Sell Limit is a conditional short position order: if the sell price in the future market exceeds the sell stop price set by the trader (the sell stop price must be higher than the current market) sell price), the sell limit order will be filled. (Traders at this time expect the price to be close to the top and then fall back, so this is also called “bounce selling”).
Stop Loss Order (Stoploss) A pending order (stop loss) that allows a broker to close a position after suffering a certain amount of loss. The stop-loss price for long positions can only be lower than the current market price; while the stop-loss price for short positions can only be higher than the current market price. If your position is profitable, your stop loss can be placed at the opening price (if the trade does have a chance to be profitable), or at the profit price zone (when your profit falls, you can close the position immediately).
Take profit is a pending order (take profit) that allows the broker to close the position after reaching a certain level of profit. This kind of pending order can fix the original floating income. The take profit of a long position can only be higher than the current market price; and the take profit of a short position can only be lower than the current market price. If your trade is losing money, you can set your take profit at the loss zone (which ensures that you can close the position as soon as your losses decrease), or at the opening price (if the trade does have a chance to break even).
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