Every trade starts with an order — an instruction telling your broker what to buy or sell, and at what price. Choosing the right order type is part of planning a trade properly, not just clicking "Buy" or "Sell" the moment you decide to enter.
Market Order
A Market Order executes immediately at the current price. It's the simplest order type — you want in (or out) right now, and you accept whatever price is currently available.
The phrase "whatever price is currently available" hides a real cost: between clicking and filling, price can move, so the fill can differ slightly from the price on screen. This difference is called slippage. In a calm market on a major pair it's negligible; during news releases or thin hours (see Trading Sessions) it can be many pips. Market orders are the right tool when being in the trade matters more than the exact price — and the wrong tool when your whole edge depends on a precise entry.
Pending Orders
A pending order waits until price reaches a level you choose, then triggers automatically. There are four common types:
- Buy Limit — placed below the current price. Used when you expect price to dip down to a support level and then bounce back up — you want to buy at the cheaper price.
- Sell Limit — placed above the current price. Used when you expect price to rise to a resistance level and then fall back down — you want to sell at the higher price.
- Buy Stop — placed above the current price. Used when you expect a breakout — if price pushes past a resistance level, you want to buy into the momentum.
- Sell Stop — placed below the current price. Used when you expect a breakdown — if price falls past a support level, you want to sell into the momentum.
A Concrete Example
Suppose EUR/USD trades at 1.0850, with support at 1.0800 and resistance at 1.0900. From this single situation, all four pending orders describe four different trade ideas:
- A Buy Limit at 1.0805 — "if price dips to support, I want to buy the bounce."
- A Sell Limit at 1.0895 — "if price rallies to resistance, I want to sell the rejection."
- A Buy Stop at 1.0910 — "if price breaks above resistance, I want in on the breakout."
- A Sell Stop at 1.0790 — "if support breaks, I want to ride the breakdown."
Note the placement detail: the limit orders sit slightly inside the levels (price may not touch the exact line before turning), while the stop orders sit slightly beyond them (to avoid being triggered by a wick that pokes the level without really breaking it).
Limit vs Stop: The Key Difference
The names describe why you're placing the order relative to price, not just direction:
- Limit orders assume price will reverse once it reaches your level (buying low / selling high, betting on a bounce).
- Stop orders assume price will keep moving once it reaches your level (buying high / selling low, betting on continuation).
There's also an execution difference worth knowing: a limit order fills at your price or better — it can't slip against you. A stop order becomes a market order when touched, so in a fast market it can fill worse than the level you set. This is also true of a Stop Loss: it guarantees the trade closes, not the exact price it closes at — most visibly across the weekend gap, when price can reopen far beyond the stop.
Stop Loss and Take Profit Are Orders Too
The SL and TP you attach to a position are themselves a stop order and a limit order to close it, and both can (and should) be attached to a pending order before it ever triggers. A pending order placed with its SL/TP already set is a complete, pre-committed plan: entry condition, invalidation point, and target, all decided while you were calm — see Risk Management Basics for why that discipline matters more than any entry technique.
Pending orders in MetaTrader also accept an expiry time; otherwise they sit in the market until you cancel them. A stale pending order from last week's analysis, forgotten and still active, is a classic way to end up in a trade you no longer believe in — review open orders as part of each session's routine.
Which Order for Which Situation
- The move is happening now and you have a plan → Market Order.
- You expect a pullback to a level before continuation → Buy/Sell Limit at that level (support/resistance and Fibonacci levels are natural spots).
- You expect a breakout but don't want to buy before it's confirmed → Buy/Sell Stop beyond the level.
- You can't watch the screen at the right time — e.g. the London open happens while you're asleep — pending orders are how a plan executes without you.
Why This Matters
Using pending orders instead of only market orders lets you plan a trade in advance and walk away from the screen — the order only fills if your actual condition (a bounce at support, or a breakout past resistance) really happens, instead of you having to watch the chart and react manually in the moment. Just as importantly, deciding the level before price gets there removes the in-the-moment temptation to chase.
Always set a Stop Loss and Take Profit alongside any order — see Risk Management Basics for why that matters.