Types Of Trade Entry Orders

Types Of Trade Entry Orders

An order is an offer sent to from a trader through the broker using the brokers trading platform to effect a transaction of buying or selling a currency or index or commodity or stock at a specified price. The broker of course earns a commission on effecting these orders in the form of spreads. These orders are about trade entries and exits. They are in form of Market orders and Pending orders.


Market Order


 This is an order to instantly execute a buy or sell at the current market price. A trader executes this trade by the click of the mouse on the buy or sell button after determining the position size, risk and target. This order may be entered by the broker at the request of the trader at either a higher or lower price than requested depending on the volatility in the markets as the best available price.


Pending Order

A pending order is an instruction placed by a trader with a broker using the broker’s platform to          either buy or sell an instrument at a later time at a specified desired price. So the price is predetermined. Pending orders are used to execute a trade at a position that will be achieved by the market in the future. They can be limit orders or stop orders


These orders can be time restricted by the trader to be executed within a given timeframe beyond which they expire or automatically cancel. They are usually used to time entries at preferred levels and prices you expect it to be after, and the level you want to enter the trade at in anticipation of the expected move


A buy limit: this one is made when current price is higher than the price you want to buy at. So you set a buy limit order in anticipation that price will drop before a rally back up. So they seek to take advantage of the drop by getting a better entry to reduce risk by lowering their stop loss


A sell limit is an order set at a price higher than the current one. The trader anticipates that price will drop further but will retrace before a strong move down. so they seek to take advantage of the retracement to sell at a higher price. They leave their order in the market and when price retraces to it, it triggers automatically.


A buy stop is set at a price higher than the current price. Traders use this kind of order to looking to enter a trade with momentum as price increases.


A sell stop is set at a price lower than the current price. They want to sell when price falls to a certain level.


Trailing Stop Order is used to progressively lock in your profits after any of the above orders have been filled and your trade is running in some profits but hasn’t yet reached your target.


Stop Loss Order is used to limit loss and protect a trader’s capital in case of a bad trade. This order will automatically close a position at a particular negative price set by the trader to limit his loss incase of a trade gone bad. Traders always determine the amount of their capital they’re willing to lose per trade and they use stop loss orders to limit their risk to that amount, usually measured as a percentage of their entire trading capital.


Take Profit Order mostly known as profit target. This is an order set by the trader instructing the broker to close his trade, or in other words to exit him from the market when price reaches a certain level. Its an instruction to close his trade with the accumulated gains at a certain predetermined price.


How To Set Market And Pending Orders In The Market

Open any MT4 chart and right click. The window below will appear and follow the steps as highlighted in the fig below


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