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06.01.2024

Types of trading orders

Orders on MT4: A Key Tool for Traders

 

Forex trading requires precision, speed and effective strategies. MetaTrader 4 (MT4) is a popular trading platform that offers traders the ability to place a variety of orders to manage their positions. In this article, we will look at the different types of orders available on MT4. Each offers different benefits to traders.

 

 

Basic Order Types on MT4

 

Market Order

 

A market order is an instruction to immediately buy or sell a financial instrument at the current market price. It is the simplest type of order, ideal for traders who want to enter or exit the market quickly. An order placed by market execution (a.k.a. instant order) appears immediately on the platform when you click on it in the trading terminal. 

 

Pending orders

 

Pending orders allow a trader to set up a trade that will only be executed when the price reaches a certain level. There are several types of pending orders, such as:

  • Buy Limit: Buying at a specified price level lower than the current market price. 
  • Sell Limit: Selling at a specified price level higher than the current market price.
  • Buy Stop: To buy at a specified price level higher than the current market price.
  • Sell Stop: Sell at a specified price level lower than the current market price.

 

Trailing Stop Order

 

A trailing stop order is a dynamic way of managing risk. It allows the stop-loss level to be automatically adjusted as the price moves in a favourable direction. It is an excellent tool for traders who want to protect profits.

 

Let's talk about some of the benefits of using pending orders. Their use will certainly improve the trading process when we are not at the market and we do not want to miss a good opportunity. Besides, pro traders often use pending orders when they have several trading accounts under management without the possibility of copying their trades from one to another. 

 

Automating Trading with Pending Orders

 

Pending orders allow automation of the trading process. The trader can set up orders in advance, which is particularly useful when trading on different time intervals.

 

Risk and profit management

 

Trailing stop and stop loss orders enable traders to effectively manage risk. The ability to automatically adjust stop-losses to changing market conditions helps protect capital.

 

Diversification and Trading Strategies

 

With a variety of order types, traders have greater flexibility in implementing different trading strategies. They can use pending orders to respond to different market situations.

 

Summary

 

The speed of execution, the automation of trading and the ability to set up orders in advance make trading more efficient and customised for the individual trader. It is worthwhile to understand the differences between the different types of orders and to use them skilfully as part of your trading strategies. Most traders using price action and analysis based on other price formations will successfully use pending orders. The use of higher time intervals for trading and the work of the 'part-time' trader will also successfully use pending orders.