Mastering forex pending orders is a game changer for traders seeking precision and efficiency in Forex trading. Also, pending offers a practical solution to traders who heavily rely on technical analysis but only have a little time to monitor the market movement constantly. These tools allow traders to automate their strategies by ensuring they will never miss fortunes.
Pending orders are automated instructions that enable traders to buy or sell currency pairs when specific price conditions are met. Unlike market orders, which execute the trade immediately at current prices, pending orders only activate one satisfied predetermined criterion.
Types Of Pending Orders
Forex pending order is divided into two main categories:
- Stop Orders
Stop orders are used to enter trades at prices at the market level.
- Buy Stop: The order is placed above the current price and designed for scenarios where the price is accepted to rise further after a particular threshold.
- Sell Stop: Order set below the current price, which is ideal when the price drops once it hits a specific level.
- Limit Orders
Limit order permits the traders to enter the traders at better prices than the current market rate.
- Buy Limit: Place an order below the current price and utilize it when a rebound is expected after the price dips to a certain level.
- Sell Limit: An order is placed above the current price. This is suitable when a decline is predicted to follow a rise to a specific point.
How Forex Pending Orders Work?
Spelling orders operate beastly on precise market conditions, allowing traders to execute their strategies efficiently. The simple explanation is given as follows:
- If the price is rising and expected to keep climbing past a certain level, then Buy Stop ensures automatically at the desired momentum.
- For a falling price expected to drop further, a Sell Stop enables automatic execution as the decline continues.
- If a rising price is expected to reverse after peaking, a Sell Limit enables the traders to occur at the higher price before the drop.
- A buy limit secures a lower entry before the price rises if the price is falling but is anticipated to rebound after hitting a low.
Setting Up Forex Pending Orders
Meta Trader 4 is a widely preferred platform for forex trading, known for its robust and user-friendly interface features. Setting up forex pending orders on MT4 is a simple process given below:
- Access the Order Window: Open the “new order” window by the toolbar, chart interference, context menu, or the F9 button.
- Configure Trade Details: Select the desired currency pair and specify trade volume. Choose one of the four order types according to your preference and input the target price in the relevant field.
- Set expiry time: Select an expiration date and time for the order to ensure that the order does not remain active in short-term strategies.
- Take profit levels and add stop loss: Define take profit and stop loss parameters for risk management and securing profits.
- Place the order: Double-check all the details and click place to activate the pending order.
- Modify & Monitor Orders: Monitor orders through the trade tab in the terminal. If necessary, delete or modify them by clicking delete or modify order.
