List of Pending Orders on MT5
A pending order is the trader’s instruction to a brokerage company to buy or sell a security in future under pre-defined conditions. Types of pending orders:
- Buy Limit
- A trade request to buy at the Ask price that is equal to or less than that specified in the order. The current price level is higher than the value in the order. Usually this order is placed in anticipation of that the security price, having fallen to a certain level, will increase.
- Buy Stop
- A trade order to buy at the “Ask” price equal to or greater than the one specified in the order. The current price level is lower than the value in the order. Usually this order is placed in anticipation of that the security price, having reached a certain level, will keep on increasing.
- Sell Limit
- A trade order to sell at the “Bid” price equal to or greater than the one specified in the order. The current price level is lower than the value in the order. Usually this order is placed in anticipation of that the security price, having increased to a certain level, will fall.
- Sell Stop
- A trade order to sell at the “Bid” price equal to or less than the one specified in the order. The current price level is higher than the value in the order. Usually this order is placed in anticipation of that the security price, having reached a certain level, will keep on falling.
- Buy Stop Limit
- This type combines the two first types being a stop order for placing Buy Limit. As soon as the future Ask price reaches the stop-level indicated in the order (the Price field), a Buy Limit order will be placed at the level, specified in Stop Limit price field. A stop level is set above the current Ask price, while Stop Limit price is set below the stop level.
- Sell Stop Limit
- This type is a stop order for placing Sell Limit. As soon as the future Bid price reaches the stop level specified in the order (Price field), a Sell Limit order will be placed at the level specified in Stop Limit Price field. A stop level is set below the current Bid price, while Stop Limit price is set above the stop level.
How to effectively use pending orders?
The pending order strategy has gained great popularity among foreign exchange traders. This situation is caused by the high efficiency of this type of work strategy, which can reduce the psychological pressure of market participants, and can establish profitable positions in the event of sharp changes in prices. With the help of this strategy, the profitability from foreign exchange transactions can be increased several times. In order to improve transaction efficiency, it can be used by novices and professionals.
To use this strategy correctly in your work, you should determine the price, which will generate order execution, stop loss options and profit orders, and the existing order cycle.
Therefore, the pending order strategy is implemented based on the following operations:
1. Determine the entry point
There are several definite methods. One way is to determine the basic entry point. For this, the trader must recognize the important minimum and maximum price values. When this point is reached, the trend is likely to continue to move.
If the price moves within a price channel for a period of time, another method can be used. In the event that the support or resistance line is expected to rupture, the trader can set order parameters.
It is also possible to use sell to buy and sell limit orders. They are sold with an expectation that the price will reach a certain point, where for limit-price buying, its price will be lower than the current price, for limit-price selling-its price will be higher than the current price, and will be in the current trend The direction changes downward. For pending orders to buy stop loss, it is expected that the price will continue to move in the bullish direction, which means that the price will rise. For stop-loss selling, everything will be reversed, and the price will continue to move in the bearish direction and decrease more toward the level where the order is sold.
The next method is the use of information. Traders need to know important news releases in advance and compare current prices to sell higher or lower orders. Based on the confirmation of this information, the trend will continue to move, otherwise a reversal will occur. In any case, order execution will occur.
2. Place a stop loss order
This order is submitted according to the trader’s trading strategy and fund management . All the advantages and disadvantages can be seen in the article “Stop Loss”.
3. Sell arbitrage orders
Its parameters depend on the trader’s ambitions and the current market situation of certain currency pairs. You should estimate the amount of possible profit and the possibility of a trend reversal.
4. The lifetime of the order
This aspect of the described strategy is very important. You must define its expiration period to execute pending orders under the parameters set by the trader. Otherwise, the order may not be executed under the trader’s trading strategy.
Considering similar nuances, you can learn how to effectively use pending order strategies to improve the results of foreign exchange transactions.