Pending orders
The four pending orders, where each one sits relative to price, and when a trader reaches for each.
An order that waits
In the foreign exchange market a pending order is an order to buy or sell a pair at a price level the market has not reached yet. Traders use pending orders to enter at a level they want when the market is not trading there now.
The four kinds
A buy limit is an order to buy below the current price. You use it when you expect price to fall to a level before it rises again.
A sell limit is an order to sell above the current price. You use it when you expect price to rise to a level before it falls again.
A buy stop is an order to buy above the current price. You use it when you expect price to keep rising once it reaches a level.
A sell stop is an order to sell below the current price. You use it when you expect price to keep falling once it reaches a level.
Using them
Pending orders are placed on the broker's platform and fill automatically when price reaches the level in the order.
How you use them depends on the strategy. A trader might place a buy limit to go long when price comes down to a support level, or a sell stop to go short when price breaks below a key level.
Size a pending order the same way as any trade: work the lot size out from the account balance, the risk you accept and the loss if it goes against you, and attach a stop loss and a take profit to it.
When it fills
A pending order that fills becomes a trade in your log like any other, stamped with the time it triggered rather than the time you placed it, so you can see how long your levels waited and how many of them were ever reached.
Trades
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