What Types of Orders are Available on MetaTrader 4 (MT4)

TutorialsJanuary 21, 2022

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In forex trading, mastering all the commands is an essential and basic knowledge you should know. In addition to the two popular limit orders that every trader has heard of, such as buy limit and sell limit, forex also has several other order types that help you optimize when trading. This article helps you learn all the order types on the MT4 platform, as well as the pros and cons of each.

1. Market Order

As the name suggests, Market Order is a trade order executed immediately at the current price in the market. 

If you want to get into the forex market right away, you can trade a market order, and the system will execute the order immediately.

Example: At present, the Current EUR/USD price is 1.11689, the Ask price is 1.11689, and Bid is 1.11707.

  • If you want to buy EUR/USD right now, the Broker will sell it to you at Ask EUR/USD = 1.11707When you click Buy, your order will be executed immediately.
  • If you want to sell EUR/USD right now, the Broker will buy with Bid price EUR/USD = 1.11689. This command will be executed immediately.

And day traders and scalpers often use market orders to quickly enter and exit the market.

Advantages of Market Execution:

• You can execute trading orders immediately.

• Do not worry about missing opportunities. So many traders use market execution because they are speedy and convenient.

Disadvantages of Market Execution:

• Hard to find a good entry point when entering an order.

• Sometimes, if you execute an order at the right time when the market is volatile, the spread is wide, it will put you at a considerable disadvantage.

2. Pending Orders

In contrast to a market order, a pending order is to buy/sell at your desired price, not the current market price. There are two main types of pending orders in forex:

What Types of Orders are Available on MetaTrader 4 (MT4)

Buy Limit, Sell Limit

This is a typical order type that follows buying low and selling high. In which:

Buy Limit: A pending buy order is established when you expect that the price continues to go up, but before going up, the price may have to fall first. Therefore, you set up Buy Limit to buy at a better price, cheaper than the current market price.

Sell ​​Limit: a trade is placed when you expect the price to fall, but before they drop, the price (probably) has to move higher than the current price. Therefore, Sell Limit is set up to place a sell order at a higher price, and when the price falls in the direction you expect, you will profit more.

Buy Stop and Sell Stop

Contrary to the “buy low, sell high” form of the above two pending orders. Buy Stop and Sell Stop orders mean “buy high and sell low.”

Buy Stop (Waiting to buy at a high price): this is how you execute a Buy order at a price higher than the current market price. Orders of this type are usually placed because investors believe that, before confirming the uptrend, it will have to break through resistance levels or trend lines to continue increasing.

Sell ​​Stop (Waiting to sell at a low price): This is how you execute a Sell order at a price lower than the current market price Because you still have to wait for the price to break through the resistance and support levels to confirm the trend. The price direction is down or not, then start to enter the order.

Advantages of pending orders

• Find an excellent entry point to get a better price than the market price.

• Because you can buy at a better price, it will have a high Risk: Reward ratio, and a short stop loss, so you will avoid the risk of entering an order.

Disadvantages of pending orders

• Must be very patient, sometimes it may take hours or days to execute orders. 

• In many cases when using a sell stop or buy stop, you will have to buy at a high price and sell at a low price. However, because life is not like a dream, it is possible that the price will not follow your expectation right after the order is executed, thus making you lose more.

3. Stop Loss and Take Profit

Stop-Loss (SL) and Take Profit (TP) are limit orders that precisely set the price level at which a position is automatically closed to avoid losses or lock in profits. However, they are used in different ways. Specifically:

What Types of Orders are Available on MetaTrader 4 (MT4)

Stop Loss

Stop Loss is used to manage the risk level for the investment amount to avoid excessive Loss of investors’ tolerance.

The stop-loss order takes effect when your Loss reaches the predetermined stop-loss price. The stop-loss price is the price you have previously set, and it will be executed if the price trend goes against your prediction.

The stop-loss price is lower than the current market price for a long position. Conversely, the stop-loss price is higher than the current market price for a short position.

Before placing a stop-loss order for a specific trade, you should consider how much Loss you can accept for that particular trade.

For example, if you place a stop-loss order in the amount of $3.7 for a buy trade. If the total investment value for this stock loses $3.7, the order will be closed automatically. This helps reduce the risk if the price falls deep.

Take profit

Take profit is used to close a trade automatically at a specific rate that you are happy to close an order for a profit. When the trade is profitable and reaches the previously set price, the trade will automatically be closed.

For a long position, the take profit is higher than the current market price. Conversely, the take profit is lower than the current market price in a short position.

Deciding when to exit a profitable trade is just as important as choosing when to exit a losing trade because it affects how fortunate you are in the long run.

By using SL and TP, traders no longer worry about being stuck at their computer waiting for a specific price to execute trades manually.

4. Trailing Stoploss

A trailing stop loss is a risk management tool that allows traders to adjust the stop price at a fixed percent or amount of pips above or below the market price, depending on whether the position is BUY or SELL.

A trailing stop-loss order is almost the same as a regular stop-loss order. A trailing stop loss only differs from a regular stop-loss in that it moves whenever the price moves in your favor.

When the trend changes or the trader realizes he is going against the trend, this stop-loss order will help you sell at the highest price possible. The highest price that can be calculated is the price point at which the trend reverses.

Orders are the most important tool for any trader and proficient use of all orders is one of the basic and mandatory skills for every trader to control their positions. transaction position. Not only help traders participate in transactions, trading orders are also used to optimize profits as well as limit risks during trading.

Furthermore, understanding what each order means, the differences between them, and how to use them effectively will help you determine which orders are right for your needs and trading strategy. achieve your trading goals.


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