While trading in the financial market there are two types of methods that can be used to place your trades – one that is immediate and another is according to the coming price of your choice – below is a detailed explanation for forex trading and commodity trading learners.

• Market order is the simplest and most understandable of all. This is an order to sell or buy the asset at the current market price immediately. The priority of the order is immediate and fast execution.
• Limit order is an order to sell or buy the asset at the specified price.

Based on these two orders, there have been creates several order types on MetaTrader 5 platforms. On other platforms, things might work differently. For example:

Buy Limit

This is a limit order to buy the asset at a price no worse than the specified one. Also, this order can be used when you need to limit the price of a not most liquid asset you are buying.

For example, when Brent oil price is $80, while the trader wants it cheaper — at $70 — they can place a pending Buy Limit order at the desirable price level. The position will open as soon as the Ask price reaches the specified level.

Sell Limit

This is a limit order to sell the asset at a price no lower than the one set in the order. This type can be used when you need to limit the selling price of a non-liquid asset.

For example, if gold now costs $3000, and the trader wants to sell it when the price reaches $3150, they can place a Sell Limit order at this level. As soon as the Bid price reaches the desired level, a selling position will open.

Buy Stop

Buy Stop is a pending order to buy the asset at a price above the current market one. This order is used by the trader to open a buying position when the price grows and reaches a certain level.

For example, if the trader expects EUR/USD to keep growing after it overcomes 1.1700, they can place a Buy Stop a bit higher than this level. As soon as the Ask price rises above the specified level, a buying position will open.

Sell Stop

Sell Stop is a pending order to sell the asset at a price below the market price. This one is used for opening a selling position when the quotations go down and reach a level specified by the trader.

For example, if the trader expects GBP/USD to keep falling after it breaks through the support level of 1.3700, they can place a Sell Stop order a bit lower than this level. As soon as the Bid price reaches it, a selling position will open.

Find more about placing and using Buy Limit, Sell Limit, Buy Stop, and Sell Stop pending orders by registering for a demo trading account with us at XGLOBAL. We offer links to download mt5 directly from our website for your desired device.