In Forex trading, it often happens that novice traders have to sit for days in front of the monitor, waiting for favorable conditions for entering a trade. At the same time, not all of them think about whether it is worthwhile to immediately buy or sell an asset at a price that seems attractive at the moment?
There are many ways to make it easier for a trader to trade and shorten their waiting time without losing a profit on the transaction.
Pending Order - a trader’s order to conclude a transaction at a price that differs from the current market.
The principle of operation of a pending order and its advantages
A pending order kicks in as soon as the price reaches the mark that was determined in advance: for purchases - this is Ask, for sales - Bid. Simply put, somebody buys or sells a currency at a price threshold that is personally set which is preferable for you to complete the transaction. Pending orders are very popular with large companies, as they are characterized by increased accuracy.
As a result of such a delay, the following advantages are as follows:
The set opening price does not change regardless of large changes in the currency price surrounding volatility.
You can calmly wait out the speculative market or use the full potential of news trading.
A pending order will be executed immediately, without delays (requotes).
Automatic opening and closing of an order.
Pending Order Types
There are several types of pending orders:
an order to sell at a price higher than the current market price.
a buy order at a price below the current market price.
an order to sell at a price below the current market price.
a buy order at a price higher than the current market price.
A protective order is a type of pending order that is used when the indicated price is worse for the trader than the current market one. Represents insurance against unforeseen price movements.
Mental stop - a situation when a trader hopes that he will have time to close a position before an unfavorable situation develops on the market.
Stop Loss - closes a deal as soon as an currency starts moving towards a price that are not profitable for a trader, that is, it will bring guaranteed losses.
Stop Trade - closes the transaction at the point where the price of the acurrency still makes a profit. It is a logical continuation of the Stop Loss action.
Trailing Stop - automatically moves along with the price change to close the deal before the price starts to decline. It is an automatic analogue of Stop Trade.