Pending order

When trading Forex, you cannot be at the trader’s terminal all the time, and a successful situation to enter the market can arise at any moment; in order to open a position at this particular time, a pending order is used.

Pending order is an order to open a new position, which will be triggered only if certain conditions are met - the rate reaches a certain point or the required time arrives.

This type of orders is used in almost all trading strategies, so it is advisable to dwell on this issue in more detail.

Pending orders have the following characteristics:

Direction - to buy or sell, and not necessarily in an uptrend, only an exclusively buy order is placed.

A trader can also place a sell order if he is sure that the trend will change after some time. Type - such orders can be of two types: stop and limit; stop implies a purchase at a price in the direction of the trend, for example, when placing a Buy stop , you are required to specify a price higher than the existing one. Another option for limit orders makes it possible to place an order using the opposite principle. For example, when setting a Buy limit, you can already specify a price lower than the existing one.

Time – if desired, you can limit the time until which the pending order should be executed; if within the specified period the price does not reach the required level, the order is canceled.

Strategies using Pending order.

The most common trading option, which usually uses pending orders, is the “ Level Breakout Strategy ”.

You first determine the points at which the trend will definitely go further, and then place a pending order and wait for it to be triggered. Flat Strategy is no less popular ; it is used in cases where the market has been in one place for a long time.

Its main advantage is that a flat is always followed by a sharp rise in price, so if you place a pending order on the border of a possible breakthrough, you can be guaranteed to make a good profit. You can also get acquainted with some trading options in more detail in the article “ Pending Order Strategy ”.

When using this type of orders, you should not forget about setting stops, since you will not be able to control the triggering of a pending order and a change in the situation can lead to the loss of the deposit.