Forex Order Types

An order is an instruction you give your broker to open or close a trade. Some orders fill straight away. Others wait until price reaches a level you choose. Knowing the difference stops you from buying at the wrong price.

Bid, Ask and Which Price You Get

Every quote has two prices. The bid is the price you can sell at. The ask is the price you can buy at. The gap between them is the spread.

You buy at the ask and later close (sell) at the bid.
You sell at the bid and later close (buy back) at the ask.

This matters for orders: buy orders trigger on the ask, sell orders trigger on the bid. Revise this in Reading Quotes.

Market Orders

A market order says "buy or sell now, at the best price available". It fills almost instantly.

Example

EUR/USD is quoted 1.0850 / 1.0851.

You click Buy 0.10 lots. You are filled at the ask, 1.0851.

If you clicked Sell, you would be filled at the bid, 1.0850.

Note: A market order guarantees you get in, but not the exact price. In fast markets the price can move between your click and the fill.

Pending Orders

A pending order waits on the broker's server until price reaches your chosen level. Then it becomes a market order and fills. There are two families:

Limit orders: get a better price than now. Buy cheaper or sell higher. You expect price to come to you and then turn.
Stop orders: get in when price breaks through a level. Buy higher or sell lower. You expect the move to continue.

Combine the two families with buy and sell and you get four pending orders:

Order	Placed where?	Triggers when	Your idea
Buy Limit	Below current price	Ask falls to your price or lower	Price will dip to support, then rise
Sell Limit	Above current price	Bid rises to your price or higher	Price will rally to resistance, then fall
Buy Stop	Above current price	Ask rises to your price	Price will break resistance and keep rising
Sell Stop	Below current price	Bid falls to your price	Price will break support and keep falling

Memory trick: Limit = "I want a bargain" (buy low, sell high). Stop = "I want to join the breakout" (buy higher, sell lower).

Pending Orders on a Chart

EUR/USD is trading around 1.0850. Here are four possible pending orders around it.

Limit orders sit "against" a move (sell above, buy below). Stop orders sit "with" a move (buy above, sell below).

Example: Buy Limit vs Buy Stop

EUR/USD is at 1.0850.

Buy Limit at 1.0810: you think 1.0810 is strong support. If price drops 40 pips to 1.0810, you buy there and hope it bounces.

Buy Stop at 1.0890: you think a break above 1.0890 resistance will start a rally. If price rises 40 pips to 1.0890, you buy there.

Both are buy orders. One waits for a dip, the other waits for a breakout.

Common mistake: Placing a Buy Limit above the current price. Most platforms reject it ("invalid price"). Others fill it immediately as a market order because the price is already "better" than your limit.

Stop Loss and Take Profit

These are orders attached to an open trade. They close it for you.

Stop loss (SL): closes the trade at a set loss, so a bad trade cannot grow. For a buy, it sits below entry. For a sell, above entry.
Take profit (TP): closes the trade at a set profit. For a buy, it sits above entry. For a sell, below entry.

A buy at 1.0850 with a 25-pip stop at 1.0825 and a 50-pip target at 1.0900.

Example

Buy 0.10 lots EUR/USD at 1.0850   (pip value $1)
Stop loss:   1.0825  →  25 pips × $1 = −$25
Take profit: 1.0900  →  50 pips × $1 = +$50
Risk : reward = 25 : 50 = 1 : 2

Tip: Set the stop loss when you open the trade, not later. Learn how to place stops well in Stop Loss & Take Profit.

Trailing Stops

A trailing stop is a stop loss that follows price as the trade moves in your favour. It never moves backwards.

Example: 30-pip trailing stop on a buy

Entry 1.0850         stop starts at 1.0820
Price rises to 1.0880  stop moves to 1.0850 (break-even)
Price rises to 1.0910  stop moves to 1.0880 (+30 pips locked)
Price falls to 1.0880  stop is hit → closed at +30 pips

Note: In MetaTrader 4 and 5 the built-in trailing stop runs in your platform, not on the server. If you close the platform or lose internet, it stops trailing. The last stop level stays in place.

OCO, GTC and Day Orders

OCO (One Cancels the Other)

Two pending orders are linked. When one fills, the other is cancelled automatically. A common use is a breakout from a range: a Buy Stop above and a Sell Stop below. Not every platform offers OCO natively.

Example

GBP/USD is stuck between 1.2680 and 1.2720 before a Bank of England decision.

You place a Buy Stop at 1.2725 and a Sell Stop at 1.2675 as an OCO pair. Price breaks up and fills the buy. The sell stop is cancelled so you are not caught on both sides.

Time in force

Time in force tells the broker how long a pending order stays alive.

Setting	Meaning
GTC (Good Till Cancelled)	Stays open until it fills or you cancel it
Day	Cancelled automatically at the end of the trading day
GTD (Good Till Date)	Cancelled at a date and time you choose

Warning: Forgotten GTC orders are a classic beginner trap. Weeks later price hits an old level and opens a trade you no longer want. Review your pending orders every day.

Slippage

Slippage is the difference between the price you asked for and the price you actually got. It happens when price moves faster than orders can be filled: during news, at the weekly open, or in thin markets.

Negative slippage: you get a worse price.
Positive slippage: you get a better price. Fair brokers pass this on to you too.

Example

Sell stop at:   1.0800
US jobs report: price drops 40 pips in one second
Filled at:      1.0794
Slippage:       6 pips against you
At 1 lot ($10/pip): 6 × $10 = $60 extra cost

Order type	Can it slip?	Why
Market	Yes	Fills at the next available price
Stop (incl. stop loss)	Yes	Becomes a market order when triggered
Limit (incl. take profit)	No negative slippage	Fills only at your price or better

Info: Some brokers offer a guaranteed stop loss (GSLO) that fills at your exact price even through gaps. You pay an extra fee for it, usually only if it is triggered.

Test Yourself With Exercises

USD/JPY is at 150.00. You want to buy only if it breaks above 150.50. Which order do you use?

Buy Limit at 150.50
Buy Stop at 150.50
Sell Stop at 150.50

Buying above the current price on a breakout is a Buy Stop.

EUR/USD is at 1.0850. You want to sell if price rallies to 1.0900 resistance. Which order?

Sell Stop
Buy Limit
Sell Limit
Buy Stop

Selling at a higher price than now is a Sell Limit.

You buy 1 standard lot of EUR/USD at 1.0850 with a stop at 1.0830. If the stop fills exactly, what is the loss?

$200
$20
$2,000

1.0850 − 1.0830 = 20 pips. One standard lot is $10 per pip. 20 × $10 = $200.

Which order type cannot suffer negative slippage?

Stop loss
Limit order
Market order

A limit order only fills at your price or better. Stops and market orders fill at the next available price.

What does an OCO order do?

Opens two trades at once
Closes all trades at the end of the day
Cancels one order when the other fills

OCO = One Cancels the Other. Two linked orders; when one fills, the other is removed.