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Kinds of orders
MetaTrader platform allows the preparation and issue of trading operations execution orders to the broker. Furthermore the terminal allows the control and management of open positions. Several types of trade orders are used for these purposes. Order is the name given to the client’s instruction to the brokerage company to conduct any transaction. There are two main types of the orders in the terminal: market orders and pending orders. Stop Loss and Take Profit orders are usually considered apart from these.
In this regard there are several types of orders.
Market Order
A market order is an instruction sent to a brokerage company order for buying or selling a financial instrument. The execution of this order results in the completion of a purchase or sale. The price of the transaction settlement is determined by the execution type which depends on the kind of the instrument. Generally buying is conducted at demand price (Ask) and selling is conducted at the offer price (Bid).
Take Profit
Take Profit is intended for obtaining a profit when reaching the forecast level of the financial instrument by price. The execution of this order execution results in complete closure of the position. It is always connected with an opened position or a pending order. The order may be set only in conjunction with a market order or pending order. The Bid price is used for checking the condition of this order for long positions, and Ask price is used for checking short positions.
Stop Loss
This order is intended for reducing losses in the event of the financial instrument price starting to move in an unprofitable direction. If the instrument price reaches this level, the position is completely closed automatically. Stop Loss is always connected with an open position or pending order. It is issued to a brokerage company only in conjunction with a market order or pending order. The Bid price is used for checking the condition of this order for long positions, and Ask price is used for checking short positions.
Take Profit and Stop Loss levels are set for the position according to the last order (market order or executed pending order). In other words, the stop levels of each subsequent order on a position will replace the previous ones.
Pending Order
Pending order is an instruction sent to a brokerage company order for selling or buying a financial instrument in future at set conditions. The types of pending order are as follows:
Buy Limit – trade order to buy at the Ask price equal to or lower than the price specified in the order. At this time the current price level is higher than the value specified in the order. Orders of this type are usually placed in the expectation that the price will come up after having fallen to a certain level.
Buy Stop – trade order to buy at the Ask price which is equal to or higher than the price specified in the order. At this time the current price level is lower than the value specified in the order. Orders of this type are usually placed in the expectation that the instrument price will reach a certain level and continue to rise.
Sell limit – trade order to sell at the Bid price which is equal to or higher than the price specified in the order. At this time the current price level is lower than the value specified in the order. Orders of this type are usually placed in the expectation that the price will fall after having reached a certain level.
Sell Stop – trade order to sell at the Bid price which is equal to or lower than the price specified in the order. At this time the current price level is higher than the value specified in the order. Orders of this type are usually placed in the expectation that the instrument price will reach a certain level and continue to fall.
Buy Stop Limit – this order type is a combination of the first two types, being a stop order setting a limit order for buying (Buy Limit). As soon as the future Ask price reaches the value specified in the order, the Buy Limit order will be placed at the level specified in the order. At the time the current price level is lower than the price at which the pending order will be set.
Sell Stop Limit – this order type is a stop order setting a limit order for selling (Sell Limit). As soon as the future Bid price has reached the value specified in this order, the Sell Limit order will be placed at the level specified in the order. At the time the current price level is higher than the price at which the pending order will be set. And the pending order price is higher than the level it was set at.
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MetaTrader platform allows the preparation and issue of trading operations execution orders to the broker. Furthermore the terminal allows the control and management of open positions. Several types of trade orders are used for these purposes. Order is the name given to the client’s instruction to the brokerage company to conduct any transaction. There are two main types of the orders in the terminal: market orders and pending orders. Stop Loss and Take Profit orders are usually considered apart from these.
In this regard there are several types of orders.
Market Order
A market order is an instruction sent to a brokerage company order for buying or selling a financial instrument. The execution of this order results in the completion of a purchase or sale. The price of the transaction settlement is determined by the execution type which depends on the kind of the instrument. Generally buying is conducted at demand price (Ask) and selling is conducted at the offer price (Bid).
Take Profit
Take Profit is intended for obtaining a profit when reaching the forecast level of the financial instrument by price. The execution of this order execution results in complete closure of the position. It is always connected with an opened position or a pending order. The order may be set only in conjunction with a market order or pending order. The Bid price is used for checking the condition of this order for long positions, and Ask price is used for checking short positions.
Stop Loss
This order is intended for reducing losses in the event of the financial instrument price starting to move in an unprofitable direction. If the instrument price reaches this level, the position is completely closed automatically. Stop Loss is always connected with an open position or pending order. It is issued to a brokerage company only in conjunction with a market order or pending order. The Bid price is used for checking the condition of this order for long positions, and Ask price is used for checking short positions.
Take Profit and Stop Loss levels are set for the position according to the last order (market order or executed pending order). In other words, the stop levels of each subsequent order on a position will replace the previous ones.
- Trailing Stop can be used for automating the movement of the Stop Loss order following the price.
- Trailing Stop is one of the most efficient profit maximisation tools. This order type is very suitable for the trading when there is no opportunity to follow changes in the state of the market. It introduces a Stop Loss control algorithm when Meta Trader “triggers” Stop Loss at a profit volume of X points.Trailing Stop is used during position opening and is set not at the server but at the client terminal.
- The execution of Take Profit and Stop Loss orders results in complete closure of the position.
Pending Order
Pending order is an instruction sent to a brokerage company order for selling or buying a financial instrument in future at set conditions. The types of pending order are as follows:
Buy Limit – trade order to buy at the Ask price equal to or lower than the price specified in the order. At this time the current price level is higher than the value specified in the order. Orders of this type are usually placed in the expectation that the price will come up after having fallen to a certain level.
Buy Stop – trade order to buy at the Ask price which is equal to or higher than the price specified in the order. At this time the current price level is lower than the value specified in the order. Orders of this type are usually placed in the expectation that the instrument price will reach a certain level and continue to rise.
Sell limit – trade order to sell at the Bid price which is equal to or higher than the price specified in the order. At this time the current price level is lower than the value specified in the order. Orders of this type are usually placed in the expectation that the price will fall after having reached a certain level.
Sell Stop – trade order to sell at the Bid price which is equal to or lower than the price specified in the order. At this time the current price level is higher than the value specified in the order. Orders of this type are usually placed in the expectation that the instrument price will reach a certain level and continue to fall.
Buy Stop Limit – this order type is a combination of the first two types, being a stop order setting a limit order for buying (Buy Limit). As soon as the future Ask price reaches the value specified in the order, the Buy Limit order will be placed at the level specified in the order. At the time the current price level is lower than the price at which the pending order will be set.
Sell Stop Limit – this order type is a stop order setting a limit order for selling (Sell Limit). As soon as the future Bid price has reached the value specified in this order, the Sell Limit order will be placed at the level specified in the order. At the time the current price level is higher than the price at which the pending order will be set. And the pending order price is higher than the level it was set at.
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