Orders that wait for your price
A pending order is an instruction to open a trade automatically if the price reaches a level you choose. It lets you plan trades in advance instead of watching the screen.
The four types
| Order | Placed | Idea |
|---|---|---|
| Buy limit | Below current price | "Buy if it dips to support" |
| Sell limit | Above current price | "Sell if it rises to resistance" |
| Buy stop | Above current price | "Buy if it breaks above resistance" |
| Sell stop | Below current price | "Sell if it breaks below support" |
Limit orders aim for a better price than now. Stop orders follow momentum once a level breaks.
Example
EUR/USD is at 1.0850. You believe 1.0820 is strong support. You place a buy limit at 1.0822, with a stop loss at 1.0795 and a take profit at 1.0880. If the price dips to 1.0822, your trade opens automatically with protection already in place.
Things to know
- Pending orders can expire or be cancelled; set an expiry if your idea is only valid for a day.
- Stop orders can suffer slippage in fast markets.
- A price gap over the weekend can trigger an order at a worse price than set.