Key Takeaways
- Market orders execute immediately at the best available price. Use when speed matters more than exact price
- Pending orders (limit and stop) execute only when price reaches your specified level. Use for planned entries
- Stop loss and take profit orders protect your positions automatically. Many traders include them as standard components of their trade execution
- Trailing stops lock in profit as price moves in your favor. Useful for trend-following strategies
Market Orders
The simplest order type: buy or sell immediately at the current market price.
How Market Orders Work
A market order tells your broker to execute at the best available price right now. You click buy or sell, and the order is filled almost instantly. The actual fill price may differ slightly from the displayed price (slippage), especially during fast markets.
When to Use Market Orders
Use market orders when you need immediate execution and the exact fill price is less important than getting into the position. Common scenarios: breakout trades where price is moving fast, or closing a position urgently.
Slippage Risk
During volatile conditions or low liquidity, market orders can fill at prices worse than expected. The more liquid the pair and the smaller the position, the less slippage you will typically experience.
Pending Orders
Pending orders wait at a specified price level and execute automatically when the market reaches that price.
Buy Limit
Placed below the current price. Triggers when price drops to your level. Use when you expect price to fall to a support level and then reverse upward. Example: price is at 1.0900, you place a buy limit at 1.0850.
Sell Limit
Placed above the current price. Triggers when price rises to your level. Use when you expect price to rise to a resistance level and then reverse downward. Example: price is at 1.0900, you place a sell limit at 1.0950.
Buy Stop
Placed above the current price. Triggers when price rises to your level. Use for breakout strategies where you want to buy on momentum above a resistance level. Example: price is at 1.0900, you place a buy stop at 1.0950.
Sell Stop
Placed below the current price. Triggers when price drops to your level. Use for breakout strategies where you want to sell on momentum below a support level. Example: price is at 1.0900, you place a sell stop at 1.0850.
Stop Limit Orders
A two-step order: a stop price activates the order, and then a limit price defines the maximum (or minimum) acceptable fill price. This gives you breakout entry with price control, but the order may not fill if the market gaps past your limit.
Protection Orders
Stop loss and take profit orders manage your risk and lock in gains automatically. Disciplined traders commonly use them as part of a structured risk management approach.
Stop Loss (SL)
An order that closes your position at a specified loss level. If you buy EUR/USD at 1.0900 with a stop loss at 1.0870, your maximum loss on that trade is 30 pips (plus spread). Stop losses execute as market orders when triggered, so slippage is possible during gaps.
Take Profit (TP)
An order that closes your position at a specified profit level. If you buy at 1.0900 with a take profit at 1.0960, the position closes automatically when price reaches 1.0960. Take profits execute as limit orders, so fills are typically at your price or better.
Trailing Stop
A stop loss that moves with the price in your favor. If you set a 20-pip trailing stop on a buy, the stop follows price upward but never moves back down. This locks in profit while giving the trade room to run. Trailing stops in MT5 run on your terminal, so your platform must stay connected.
Frequently Asked Questions
What is the best order type for beginners?
Many beginners start with market orders for simplicity, often pairing them with a stop loss and take profit. As you develop your strategy, limit orders can help target specific entry prices and stop orders can capture breakout setups. The most suitable order type depends on your specific trade setup and strategy.
Is a stop loss guaranteed to fill at my price?
No. Stop losses execute as market orders when triggered. During price gaps (common around news events or market opens), your stop may fill at a worse price than specified. This is called slippage. It is a normal market risk, not a broker issue.
Do pending orders expire?
In MT5, you can set an expiration date and time for any pending order. If not set, the order remains active until you cancel it or it is triggered. Good practice is to always set an expiry so forgotten orders do not execute unexpectedly.
How do I set a trailing stop in MetaTrader 5?
Right-click your open position in the Terminal window, select 'Trailing Stop', and choose a distance in points. Note: trailing stops in MT5 run locally on your computer. They stop working if your terminal disconnects. For server-side trailing, consider using an Expert Advisor.
Can I place multiple pending orders on the same pair?
Yes. MT5 supports multiple orders on the same instrument. You can set buy limits, sell limits, and stop orders simultaneously. This is useful for strategies like OCO (one-cancels-other) setups, though MT5 does not natively support OCO, so you would need an EA for automatic cancellation.
What fill policies does MT5 support?
MT5 supports three fill policies: Fill or Kill (entire order must fill or it is canceled), Immediate or Cancel (fills what it can, cancels the rest), and Return (partial fill, remainder stays as pending). Available policies depend on the broker's configuration and the specific instrument.
Master Your Order Execution
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