Pending order Buy Limit

Pending order Buy Limit

Pending order Buy Limit

Here we will tell you about the pending Buy Limit order. We will show you how to open it on the chart, and also find out what is the difference between Buy Stop and Buy Limit orders.

A pending order in the Forex market is a certain type of order that is set at a certain distance from the current market price in advance. If we talk specifically about a pending Buy Limit order, its opening will occur after the price reaches the level set by the trader.
Types of pending orders

What to understand, what is the difference between Buy Limit and sell Limit you need to know what types of pending orders exist.

Pending orders or, as they are also called by traders, “deposits” are of the following types:

Buy Stop);
Buy Limit (Buy Limit);
Sell Stop (Sell Stop);
Sell Limit Sell Limit).

As you can see, there are only 4 types of pending orders. You need to know each of them and understand how to display them on the price chart.
How do I place a pending BuyLimit order?

It is very easy to place a Buy Limit order. It is set below the current price value in the hope that the price will rise. That is, when a Forex trader analyzes the market and sees that the asset will continue to rise, he calculates how far the price will fall before going up and sets a pending Buy Limit order at this point. This can be the support level or the Fibonacci level.

This is how an example of a Buy Limit order will look like:

pending order buy limit

As soon as the price falls to the green dotted line where the pending Buy Limit order is opened, a buy order will immediately open.

There are two ways to place a pending Buy Limit order:

By clicking the right mouse button, a small window will appear in which you will be asked to open orders of the Buy Limit or Buy Stop types, after the cursor is placed under/above the price.
By pressing the F9 hotkey. A dialog box will appear where you need to select ""pending order"".

Important: pending orders, regardless of the type, should always be placed together with take Profit and Stop Loss stop orders. It is not always possible to track the price movement.

What should a trader do if, for example, the price touches a Buy Limit order in the dead of night without placing stop orders? Many times it has happened that the order is hit, but the price reverses and goes against the trader's forecasts. In the morning, you can observe a significant drawdown. Therefore, it is highly desirable to set a stop loss and take profit at the stage of placing certain pending orders.
What is a pending Buy Stop order?

A pending buy stop order is a relative of a Buy Limit order. This is what a pending Buy Stop order looks like:

buy stop and buy limit difference

 

As you can see from the screenshot above, a pending order of the Buy Stop type is placed when they want to buy, but the current price is below the set buy Stop delay. By the way, if you place any pending order close to the values of the current price, the MT4 trading terminal simply will not allow you to do this.

A pending Buy Stop order is an order to a particular Forex broker to buy the selected asset at a "" bad "" price, that is, more expensive than it is at the moment. This type of delay is set only when the probability of continuing the upward trend is high. That is, the trader is sure that the price will definitely grow, so you can not buy the asset at the current price, but set the Buy Stop delay.
What is the difference between Buy Stop and Buy Limit?

Before naming the differences between pending Buy Limit and Buy Stop orders, let's talk about their similarities.

What is common between pending Buy Stop and Buy Limit orders is that they have the same root-Buy. That is, the order,calculated on the purchase. The difference between Buy Stop and Buy Limit is that the first pending order is placed below the current price, while the Buy Limit is placed above the current price.
Conclusion

Why do I need pending orders in the Forex market? First of all, they were invented to save time for traders. This is convenient because it allows you to enter the market not at the current market price, but at the one that, in the trader's opinion, is the most profitable.

Currency market participants don't have to sit in front of the monitor for hours on end. It is enough to devote half an hour to technical analysis in order to correctly place pending orders of the Buy Limit or Buy Stop type in order to be free for the rest of the time. Among the advantages of placing pending orders is the fact that the current price may not reach the placed pending order, thus not meeting the trader's forecasts and expectations. This is better than opening orders at the current price without knowing for sure where the asset price will decide to go.

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